2016 (9) TMI 687 - AT - Service Tax

Demand - Classification - Whether curriculum development, handicraft project, Accounts manual preparation, proposal for carrier facilitation centre etc. services would come under scientific and technical consultancy services or not - Held that - the nature of the various services on which service tax have been demanded, it is fairly obvious that none of the services will fall even remotely within the category of scientific and technical consultancy under section 65(92) of the Finance Act 1994. Curriculum development even for scientific course cannot be brought under scientific or technical consultancy. It is beyond comprehension as to preparation of accounts manual proposal for carrier facilitation centre or handicraft product falls within the above category. Therefore, the demands made without any basis are set aside. - Decided in favour of appellant

Summary

Issues:
1. Whether the services provided are liable for service tax under the category of Scientific And Technical Consultancy Services.

Analysis:
The appeal was filed against an order passed by the Commissioner (A) Bhopal, where demand of Service Tax was raised on various services provided by the appellant. The appellant was engaged in providing Business Auxiliary Services, and it was observed during scrutiny that they also provided services like scientific or technical consultancy services, commercial coaching or training services, and management consultancy services. The original order dated 27.08.2009 raised a demand for service tax on these services. In the impugned order, the demand on several services was set aside, but upheld on services such as curriculum development, handicraft project, accounts manual preparation, and proposal for carrier facilitation center. These services were held liable for service tax under the category of Scientific And Technical Consultancy Services, taxable from 16.07.2001.

The appellant challenged this part of the order, arguing that the services provided by them did not fall under scientific and technical consultancy services and hence were not liable for service tax. The definition of scientific or technical consultancy under section 65(92) of the Finance Act 1994 was considered, which defined it as any advice, consultancy, or scientific or technical assistance rendered by a scientist or technocrat, or any science or technology institution or organization to a client in one or more disciplines of science or technology. However, upon considering the nature of the various services for which service tax was demanded, it was found that none of the services could be categorized as scientific and technical consultancy. Even curriculum development for scientific courses did not fall under this category, let alone the preparation of accounts manual, proposal for carrier facilitation center, or handicraft project.

Consequently, the demands made without any basis were set aside, and the impugned order was overturned. The appeal was allowed, and the demands on the mentioned services were dismissed.