2018 (6) TMI 1427 - AT - Service Tax

Classification of Services - Biomass availability studies - whether classified under Consulting Engineer Service or Management Consultant services? - Held that - The respondent assessee herein has, under taken some study as also filing a report to the government organisation of Biomass availability in order to understand the capability of the particular district/village for considering Alternate Renewable Energy Resources - On glancing on the scope work as per the work order it seems that respondent has not undertaken any activities that may fall under consulting engineering services - demand set aside - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal filed by revenue against Order-in-Appeal No 47/2008
- Cross objection filed by respondent against revenue's appeal
- Allegations of service tax liability on Biomass availability studies
- Confirmation of demand, interest, and penalties by adjudicating authority
- First appellate authority's decision on merits and limitation
- Revenue's argument on activities falling under consulting engineering or management consultancy services
- Respondent's argument on services rendered not falling under consulting engineering services
- Tribunal's analysis of the services provided by the respondent
- Tribunal's decision on liability and dismissal of cross objection

Analysis:
1. The appeal was filed by the revenue against Order-in-Appeal No 47/2008, alleging service tax liability on Biomass availability studies. The adjudicating authority confirmed the demand, interest, and penalties. The first appellate authority set aside the Order-in-Original on merits but upheld the findings on limitation.

2. The revenue contended that the respondent's activities fell under consulting engineering services based on the scope of work undertaken. They argued that the respondent provided consultancy services by collecting data and preparing project reports for various government agencies. The revenue cited case laws to support their position and claimed that suppression of facts justified invoking a larger period for demanding service tax liability.

3. The respondent argued that their services did not fall under consulting engineering services. They highlighted that their primary role was assisting clients with financial statements and loan applications. The Biomass study conducted was limited to collecting data and reporting on Biomass availability for energy resources, not engineering services. The respondent referenced a Tribunal decision emphasizing the need for specific allegations in the Show Cause Notice.

4. Upon reviewing the records, the Tribunal found that the respondent's activities did not align with consulting engineering services. The Tribunal analyzed the scope of work related to Biomass availability studies and concluded that the services provided did not fall under the category of engineering consultancy. The Tribunal emphasized the distinction between providing advice in engineering disciplines and the activities undertaken by the respondent.

5. The Tribunal upheld the first appellate authority's decision, stating that the respondent's services did not qualify as consulting engineer services. The Tribunal found that the adjudicating authority failed to correctly interpret the nature of the services provided by the respondent. The Tribunal dismissed the cross objection filed by the respondent, affirming that the impugned order setting aside demands on merits was correct.

6. In conclusion, the Tribunal rejected the revenue's appeal and dismissed the respondent's cross objection. The Tribunal's detailed analysis and findings supported the decision that the respondent's services did not fall under consulting engineering services, leading to the dismissal of the appeal and cross objection.