2006 (8) TMI 64 - AT - Service Tax

Consulting Engineering Services Service tax- Appellants were engaged in conservation Works for development of tribals Such activity can t be categrised under Consulting Engineer Services

Summary

Issues:
Interpretation of 'consulting engineering services' for service tax liability.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal, challenging the classification of the services provided by the assessee as 'consulting engineering services' for the purpose of service tax. The assessee was appointed as a Consultant for a project involving ECO Restoration in a specific area, funded by an Overseas Economic Corporation. The Revenue alleged that the activities of the assessee fell under the category of consulting engineering services and demanded tax accordingly. The assessee, on the other hand, argued that their work focused on ECO development to reverse land degradation and involve the systematic management of soil, water, and biomass with community participation, especially from tribals, and thus should not be considered as consulting engineering services.

The Assistant Commissioner initially confirmed the demand raised by the Revenue, leading to an appeal before the Commissioner (Appeals). The Commissioner (Appeals) sided with the assessee, ruling that their activities did not fall within the definition of consulting engineering services. The Revenue disagreed with this decision, emphasizing that the activities involved structural, civil, mechanical, electrical, or construction engineering, and thus should be classified as consulting engineering services subject to tax. The learned Counsel representing the assessee argued against this interpretation, highlighting the primary focus of the project on ECO development and community involvement, claiming it did not fit the criteria for service tax liability.

Upon reviewing the arguments presented by both parties, the Tribunal observed that the assessee's activities did not align with providing consulting engineering services subject to service tax. The Tribunal noted that the assessee's work primarily focused on ECO conservation to utilize wastelands for the benefit of the community, particularly tribal development. Consequently, the Tribunal upheld the Commissioner's decision, deeming it legally sound. The Tribunal rejected the Revenue's appeal, stating that there was no merit in their arguments, thereby affirming the decision in favor of the assessee.

In conclusion, the Tribunal's judgment clarified that the services provided by the assessee for ECO conservation and community development did not fall under the category of consulting engineering services for service tax liability, thereby ruling in favor of the assessee and dismissing the Revenue's appeal.