2007 (10) TMI 141 - AT - Service Tax

Scientific or Technical consultancy - applicant received the technical assistance from the manufacturer of the goods not from the scientist or technocrat or science or technology institute - Pre-deposit of duty and penalty is waived Case remanded for fresh consideration

Summary

Issues:
- Waiver of pre-deposit of service tax and penalties for scientific or technical consultancy services.

Analysis:
The applicant sought waiver of pre-deposit of Service tax and penalties amounting to Rs.3,61,000 for services categorized as Scientific or Technical consultancy. The applicant argued that the consultancy and technical assistance received from manufacturers of tractor equipment did not fall under the scope of scientific or technical consultancy as defined in the Finance Act. The applicant contended that the service provider was not a scientist, technocrat, or science/technology institution, thus making the service tax demand unsustainable.

The Revenue, on the other hand, contended that the lower authorities did not consider the issue raised by the applicant and emphasized that the applicant did receive technical assistance from the manufacturer, justifying the service tax demand.

The Tribunal analyzed the definition of scientific and technical consultancy under the Finance Act, which includes advice, consultancy, or scientific/technical assistance provided by a scientist, technocrat, or science/technology institution to a client in various disciplines of science or technology. The applicant argued that the service provider was a manufacturer and not a scientist, technocrat, or scientific institution, and since the technical assistance was received to manufacture similar goods in India, the demand was not valid.

The Tribunal found that the technical assistance was indeed received from a manufacturer and not from a scientist, technocrat, or science/technology institution as required by the definition. Consequently, the Tribunal held that the applicant had a strong case, and waived the pre-deposit of duty and penalty for the appeal hearing. The impugned order was set aside, and the matter was remanded to the adjudicating authority for reconsideration after providing the appellant with an opportunity for a fresh hearing. The appeal was disposed of by way of remand.