2009 (5) TMI 177 - AT - Service Tax

Contract for inspecting and reporting on the work execution done by another party on the construction site - The entire exercise of the revenue in their appeal is directed to prove that inspection related services would fall under the category of consulting engineer services. - CBEC vide its order No. 1/1/2002, dated 26-23-2003, issued under Section 37B (of the Central Excise Act as made applicable to service tax) had clarified that certification give under authority of any code or statute can not be considered as a consulting engineer service. However the new service included in 2003 budget, namely technical inspection and certification services would cover certification of all types including that of immovable property. - new services not covered under earlier categories as per decision of Division bench of the Tribunal in the case of Board of Control for Cricket in India v. Commr. of ST, Mumbai 2007 - TMI - 1530 - CESTAT, MUMBAI - we are of the considered view that the services provided by the respondents would get covered under technical inspection and certification services with effect from the date it has been notified in the statute and the said services cannot be covered under consulting engineer services

Summary

Issues Involved: Classification of services under consulting engineer services or technical inspection and certification services for service tax liability.

Analysis:
1. The case involved an appeal against the order confirming service tax liabilities for consulting engineer services provided by the respondent. The lower authorities imposed penalties for non-payment of service tax, which the respondents challenged before the Commissioner (Appeals).

2. The Revenue argued that the services rendered by the respondent fell under technical inspection and certification services, not consulting engineer services. They highlighted the combination of technical inspection and certification tasks provided by professionally qualified engineers to the client, supporting their classification as consulting engineers. The Revenue also relied on a CBEC circular from 2002 to support their argument.

3. The respondent contended that their services did not qualify as consulting engineering services. They referenced a Tribunal Mumbai decision granting a stay and a Board Circular from 2003 clarifying that technical inspection and certification services were distinct from consulting engineering services. They also cited a Tribunal decision regarding the implementation of new levies from specified dates.

4. The Tribunal considered both arguments and examined the nature of the services provided by the respondent. They noted that the respondent offered inspection-related services at a construction site and referred to a CBEC circular clarifying that technical inspection and certification services included certification of immovable property. The Tribunal found support in the circular and a Tribunal decision, concluding that the respondent's services fell under technical inspection and certification services, not consulting engineer services.

5. Based on the analysis and legal precedents, the Tribunal upheld the Commissioner (Appeals) order, ruling in favor of the respondent. They determined that the services provided were covered under technical inspection and certification services as notified in the statute, rejecting the Revenue's appeal as lacking merit.

This detailed analysis of the judgment highlights the key arguments, legal interpretations, and conclusions reached by the Tribunal regarding the classification of services for service tax liability.