2010 (5) TMI 141 - AT - Service Tax

Consulting Engineer s Service- A show-cause notice was issued to them proposing levy of service tax on amount collected towards construction and soil testing Services. Demand of Rs.3,27,253/- was confirmed together with interest and penalty was also imposed. The Commissioner (Appeals) upheld the inclusion of soil test fee in the amount to be taxed in the light of the Tribunal s remand order but set aside the liability to tax on amounts collected in connection with the cost of construction of the building also in the light of the Tribunal s order. Hence the appeal by the Revenue. Held that- uphold the impugned order and reject the appeal.

Summary

Issues:
1. Whether service tax is applicable on amounts collected towards construction and soil testing services by holders of service tax registration providing 'Consulting Engineer's Service'?

Analysis:
The case involved the respondents, holders of service tax registration providing 'Consulting Engineer's Service,' facing a show-cause notice proposing the levy of service tax on amounts collected for construction and soil testing services. Initially, a demand of Rs.3,27,253/- was confirmed along with interest and penalty. The Commissioner (Appeals) upheld the demand but set aside the penalty. Subsequently, the Tribunal remanded the case to determine the tax liability, ruling that the amount collected for the construction of a building does not fall under 'advice, consultancy, or technical assistance,' while the soil test fee is taxable. After the remand, the adjudicating authority confirmed an amount of Rs.1,13,324/- with interest and imposed a penalty of the same amount. The Commissioner (Appeals) upheld the inclusion of the soil test fee for taxation but set aside the tax liability on amounts related to the building's construction, aligning with the Tribunal's order. This led to the Revenue's appeal.

Upon hearing the learned SDR and reviewing the records, the Vice-President found no representation for the respondents despite notice. The Vice-President upheld the impugned order, maintaining the tax liability on amounts collected for soil testing services while setting aside the taxation on amounts linked to the building's construction. This decision was based on the alignment of the findings with the Tribunal's previous order. Consequently, the appeal by the Revenue was rejected, affirming the decision of the lower authorities regarding the tax liability on the services provided by the holders of service tax registration offering 'Consulting Engineer's Service.' The judgment was dictated and pronounced in open court by the Vice-President.