2018 (7) TMI 1002 - AT - Service Tax

Classification of services - accounting/ledger maintenance work - whether the services would be classified under the category of Practicing Chartered Accountant ? or otherwise? - Held that - The impugned services rendered by the appellant to MESCOM do not fall in the category of professional activity of Chartered Accountant - these activities are exempted under Notification No. 59/98-ST dated 16.10.1998 - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE, MANGALORE VERSUS RAI ASSOCIATES 2007 (11) TMI 179 - CESTAT, BANGALORE , where it was held that the kind of activities which are involved in the present case do not fall in the definition of professional activity of the Chartered Accountant and are exempted under N/N. 59/98-ST dated 16.10.1998 - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against demand for service tax on services rendered by a Chartered Accountant, applicability of professional capacity, exemption under Notification No. 59/98-ST, validity of impugned order.

Analysis:
The appeal was filed against an order modifying the Order-in-Original that upheld a demand for service tax on services rendered by the appellant, a Chartered Accountant, to a company for accounting/ledger maintenance work. The appellant had not paid service tax on the amount received for these services. The impugned services were considered to be provided in a professional capacity, leading to a demand for service tax, interest, and a penalty. The Commissioner (Appeal) confirmed the demand but dropped the penalty invoking Section 80 of the Finance Act 1994.

The appellant argued that the impugned order was contrary to binding judicial precedents and contended that the services provided were consultancy services exempted under Notification No. 59/98-ST. The appellant entered into an agreement with the company to perform outsourcing, meter reading, billing, and ledger maintenance activities, which were not considered professional activities of a Chartered Accountant. The appellant relied on specific decisions to support their argument.

After hearing both parties and examining the material and decisions cited, the Tribunal concluded that the services provided by the appellant did not fall under the professional activity of a Chartered Accountant and were exempted under Notification No. 59/98-ST. The Tribunal found the decisions cited by the appellant applicable to the case, indicating that the activities in question were not within the definition of professional activity and were exempted under the notification. Consequently, the impugned order was deemed unsustainable in law and was set aside, allowing the appeal with any consequential benefits.

In the final judgment, the Tribunal pronounced the operative portion of the order in open court on 07/06/2018.