2012 (8) TMI 47 - AT - Service Tax

Consulting Engineers Services - application for waiver of pre-deposit of service tax - Held that - As the appellants main objective is to undertake construction activities for and on behalf of the serving employees of Government of M.P. in the Police Department, the appellant body consists various working officers of the Police department, who are managing the affairs of the Corporation, neither the corporation nor the individuals handling the said corporation are professionally qualified engineers or an engineering form, in which case they would not be prima facie covered by the definition of consulting engineers as appearing in Section 65 (31) - in favour of assessee.

Summary

Issues:
- Whether the condition of pre-deposit of service tax should be dispensed with for the applicant.
- Whether the appellant falls under the category of Consulting Engineers Services as defined under Section 65(31) of the Finance Act, 1994.

Analysis:
1. The main issue in this case is whether the condition of pre-deposit of service tax should be dispensed with for the applicant. The appellant, a company incorporated under the Company's Act, had a demand of service tax confirmed against them. The demand was based on the contention that they are covered under Consulting Engineers Services as per Section 65(31) of the Finance Act, 1994. The Adjudicating Authority referred to the corporation's memorandum of association, highlighting the main objectives related to housing schemes and construction activities for the benefit of serving employees of the Government of Madhya Pradesh in the Police Department.

2. The definition of Consulting Engineers Services as per Section 65(31) was crucial in determining the applicability of the service tax. The definition states that a consulting engineer is a professionally qualified engineer or an engineering firm providing advice, consultancy, or technical assistance to a client in engineering disciplines. Upon examination, it was found that the appellant's main objective was construction activities for the benefit of government employees, managed by officers who were not qualified engineers. Therefore, it was concluded that neither the corporation nor the individuals involved met the criteria of being professionally qualified engineers or an engineering firm, as required by the definition of consulting engineers under the Finance Act.

3. Considering the above analysis, the Tribunal found that the appellant had a good prima facie case in their favor to dispense with the condition of pre-deposit of duty and penalty. As the appellant did not fall under the definition of consulting engineers, the Tribunal ordered to allow the stay petition, thereby staying the recovery of the service tax amount confirmed against the applicant. This decision was based on the interpretation of the relevant legal provisions and the nature of activities carried out by the appellant, leading to the conclusion that the condition of pre-deposit should be dispensed with in this case.