2010 (6) TMI 159 - AT - Service Tax

Consulting Engineer versus Survey and Map-making Services - appellants were engaged in providing Survey and Map-making Services (SMS for short). They had been engaged by Government agency and the impugned activities are part of the Government projects. Held that - prima facie the activities undertaken by the appellants are classifiable under Survey and Map-making Services - considerable force in the plea of the appellants that by virtue of definition of SMS in the Act the impugned activities carried out by the appellants for the Government department were not exigible under consulting engineer service full stay granted

Summary

Issues:
1. Sustained demand of service tax under the category of 'Consulting Engineer' service.
2. Applicability of service tax on 'Survey and Map-making Services'.
3. Penalty imposition under Sections 76, 77 & 78 of the Finance Act, 1994.

Analysis:
1. The impugned order upheld the demand of service tax under the 'Consulting Engineer' service category for the period 2003-04 to 2005-06, amounting to Rs. 5,37,577. Penalties were imposed under Sections 76, 77 & 78, which were later vacated by the Commissioner (Appeals) except for the service tax and interest.

2. The appellants argued that they were engaged in providing 'Survey and Map-making Services' (SMS) primarily for Government agencies. They contended that the activities in question were not taxable under the 'Consulting Engineer' service category as the definition of 'Survey and Map-making service' specifically excluded services provided to Government agencies. The Tribunal found merit in this argument, stating that the activities were classifiable under SMS and not Consulting Engineer services. The Tribunal noted that the tax liability and interest were not quantified, leading to the conclusion that the appellants had a strong case for waiver of pre-deposit and stay of recovery.

3. The Judicial Member and Technical Member of the Tribunal concurred that the appellants had made a strong prima facie case for waiver of pre-deposit of the dues adjudged. Consequently, the application for waiver was allowed, and recovery of the dues was stayed pending the final decision in the appeal. The Tribunal's decision favored the appellants' argument regarding the nature of services provided, leading to a favorable outcome in terms of waiver of pre-deposit and recovery stay.