2008 (11) TMI 128 - AT - Service Tax

Appellant is registered as a service provider under Technical Inspection and Certification service (TICS) since 1-7-03 and their activities continue to be assessed to tax under this head since then - Since the activities continue to be classified under TICS, it cannot be held that for an earlier period i.e. before1-7-03, these activities were classifiable under the head Consulting Engineer - appellants had not suppressed any fact with intent to evade tax larger period not invokable

Summary

Issues:
- Classification of services provided by M/s. Indian Institution of Quality Assurance (IIQA) as Consulting Engineer or Technical Inspection and Certification service.
- Liability of service tax, interest, and penalties under the Finance Act, 1994.
- Interpretation of the Board's Circular F. No. 177/5/01-CX, dated 26-2-02.
- Application of the decisions in Cameo Corporation Services Ltd. v. CCE, Chennai and Diebold Systems (P) Ltd. v. CCE, Chennai to the present case.
- Assessment of activities undertaken by IIQA for the period prior to 1-7-03.

Analysis:
1. The appeal by M/s. IIQA challenged a demand of service tax and penalties imposed under the head 'Consulting Engineer'. The impugned order found that IIQA, registered for 'Technical Inspection and Certification' service since 1-7-03, had actually rendered services of consulting engineer prior to that period. The Commissioner (A) analyzed contracts with clients like BHEL, TNPL, and Sterlite, concluding that IIQA's activities qualified as consulting engineer's services under the Board's Circular.

2. The appellant argued that activities like inspection and supervision were classified under Technical Inspection and Certification service since 1-7-03, but the impugned order retroactively applied the Consulting Engineer category. The Tribunal noted agreements with clients specifying engineering consultancy services, but acknowledged the post-1-7-03 registration under Technical Inspection and Certification.

3. Relying on precedents, IIQA contended that the impugned order misapplied the law by taxing activities already covered under a new entry. The Tribunal considered the nature of services provided by IIQA, emphasizing the technical expertise involved in non-statutory third-party inspections.

4. The JDR asserted that IIQA's services fell under Consulting Engineer category, incurring tax liability. The impugned order upheld tax dues under Consulting Engineer for a specific period.

5. After evaluating the facts and submissions, the Tribunal observed that IIQA's activities were deemed engineering consultancy pre-1-7-03, but post that, registered under Technical Inspection and Certification. Citing the Board's order and precedents, the Tribunal found the demand for the pre-1-7-03 period unjustified, setting aside the impugned order and allowing the appeal.