2019 (7) TMI 210 - AT - Service Tax

Recovery of the service tax - Consulting Engineer services - period 1997-98 to 2000-2001 - whether the Appellant during the relevant period i.e. 1997-98 to 2000-01, rendered the services which fall under the category of consulting engineer service as was in force at the relevant point of time? - HELD THAT - Inasmuch the relevant service agreements with respective customers/clients have not been produced by the Appellant before the Adjudicating authority. Therefore, it is prudent to remand the matter to the Adjudicating authority to analyse the agreements that are now produced before this forum and further copies of the agreements that would be produced during de-novo proceedings. Appeal is allowed by way of remand to the Adjudicating authority.

Summary

Issues:
- Whether the services provided by the Appellant fall under the category of 'consulting engineer' services during the relevant period.
- Whether the Appellant's failure to produce relevant service agreements before the Adjudicating authority affected the decision-making process.

Analysis:
1. Issue 1 - Nature of Services Rendered:
The Appellant contended that the services provided, such as erection, commissioning, inspection, and maintenance support services, do not fall under the scope of 'consulting engineer' services. The Appellant argued that the definition of 'consulting engineer' at the relevant time did not include corporate bodies, thereby exempting them from the tax levy. Reference was made to the judgment in Simplex Engineering & Foundry Works Pvt. Ltd. Ltd Vs CCE Raipur, upheld by the Delhi High Court. Additionally, Circular No.79/9/2004-ST clarified that certain services like erection, commissioning, or installation do not fall under 'consulting engineer' services. The Appellant emphasized that most agreements were for repair and maintenance services, not consulting engineering.

2. Issue 2 - Failure to Produce Agreements:
The Special Counsel for the Respondent highlighted the Appellant's failure to provide copies of agreements despite repeated requests by the Department. This lack of documentation hindered the Adjudicating authority's ability to analyze the nature of services rendered by the Appellant. The Respondent argued that the agreements submitted during the appeal process should have been presented earlier for proper scrutiny. The Adjudicating authority decided the case based on available records, leading to a lack of clarity regarding the services provided by the Appellant.

3. The Tribunal found merit in the Revenue's argument regarding the absence of relevant service agreements before the Adjudicating authority. Consequently, the Tribunal remanded the matter back to the Adjudicating authority for a thorough analysis of the agreements presented during the appeal and any additional agreements to be submitted in the future. The Tribunal emphasized that all issues were to be reconsidered, keeping them open for further examination.

4. To ensure a timely resolution, the Appellant agreed to a fixed timeframe for the de-novo proceedings. The Tribunal directed that the proceedings be completed within four months from the date of communication of the order. Therefore, the appeal was allowed by way of remand to the Adjudicating authority for a comprehensive review based on the newly submitted agreements and any further documentation that may be provided.

5. In conclusion, the Tribunal's decision to remand the case due to the absence of crucial service agreements underscores the significance of providing complete documentation to support legal arguments and clarify the nature of services rendered, especially in tax-related disputes.