2018 (11) TMI 91 - AT - Service Tax

Consulting Engineering Services - reverse charge mechanism - services availed while importing standard design and drawings from the foreign supplier - Held that - The Tribunal in the case of Solitz Corporation vs. Commissioner of Service Tax, New Delhi 2008 (10) TMI 35 - CESTAT NEW DELHI held that design and drawing imported from foreign country on payment of agreed upon price attract the provisions of Customs Act, 1962 and have to be treated as goods. In the present case, it is a case of import of design and drawing and not a case of use of any taxable service. As such demand of service tax confirmed against the appellant is not sustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Dispute over demand of service tax for Consulting Engineering Services
- Appeal against the order passed by the Commissioner (Appeals)
- Confirmation of demand for a specific period
- Legal interpretation of the nature of imported design and drawings
- Rejection of Revenue's appeal based on previous court decisions
- Decision on the appellant's appeal regarding service tax demand

Analysis:
The judgment involves two appeals filed by both the appellant and the Revenue, arising from the same impugned order by the Commissioner (Appeals) regarding the demand of service tax for "Consulting Engineering Services." The demand was raised against the appellant for importing standard design and drawings from a foreign supplier, leading to the requirement of paying service tax on a reverse charge basis. The Original Adjudicating Authority confirmed the demand, interest, and penalty for a specific period. However, the Commissioner (Appeals) set aside the demand for the period before 18.04.2006 based on a decision of the Hon'ble Bombay High Court. The Commissioner confirmed the demand for a subsequent period, which both sides challenged.

Regarding the Revenue's appeal, the issue was considered settled as per the decision of the Hon'ble Bombay High Court, upheld by the Hon'ble Supreme Court in a related case. Since the issue was finalized by the Supreme Court, the Tribunal found no reason to interfere with the Commissioner's decision and rejected the Revenue's appeal. On the other hand, in the appellant's appeal, it was established that the imported design and drawings were treated as goods as per previous Tribunal decisions and the Customs Act, not as a taxable service. Therefore, the demand for service tax against the appellant was deemed unsustainable, leading to the setting aside of the order confirming the demand and penalties, thereby allowing the appellant's appeal.

Additionally, the judgment mentioned the disposal of Cross Applications filed by the assessee, which were in the form of written submissions, concluding the entire proceedings.