2006 (10) TMI 26 - AT - Service Tax

Consulting Engineer- Alleged that activity performed by appellant is categrised under Consulting Engineer and service tax demanded thereon- After considering details impugned order set aside

Summary

Issues:
1. Whether the consideration received by the assessee on transfer of a contract through an assignment deed is liable for Service Tax under the category of 'Consulting Engineer'?
2. Whether the activity of transferring drawings/designs and technical data without providing professional advice, consultancy, or technical assistance constitutes 'Consulting Engineer' services?

Analysis:
1. The Revenue proceeded against the assessee for levying Service Tax on the consideration received for transferring a contract through an assignment deed. The party contested this, stating that no service of 'Consulting Engineer' was provided during the transfer. The assessee had entered into an agreement for the assignment of a contract with another party, transferring technical assistance, license, and other documents for the manufacture of AC generators. The Revenue demanded Service Tax under the category of 'Consulting Engineer', which the party disputed, claiming that the transfer was merely a contract and did not involve professional services as an engineer.

2. The learned Counsel referred to previous rulings where it was established that merely supplying technology related to design, engineering, and technical specifications does not fall under the definition of 'Consulting Engineer' unless professional advice, consultancy, or technical assistance is provided. The Tribunal cited cases where the levy of Service Tax on similar transfers of technology was set aside. The Tribunal noted that the activity of transferring drawings, design, and technical data without providing professional advice or consultancy does not constitute 'Consulting Engineer' services. Therefore, the impugned order was set aside, and the appeals were allowed based on the established legal precedents.

In conclusion, the Appellate Tribunal CESTAT, Bangalore ruled in favor of the assessee, setting aside the demand for Service Tax under the category of 'Consulting Engineer' for the consideration received on transferring a contract through an assignment deed. The Tribunal emphasized that the mere transfer of technology without providing professional advice, consultancy, or technical assistance does not qualify as 'Consulting Engineer' services, as per the legal definitions and precedents cited during the proceedings.