2013 (11) TMI 552 - AT - Service Tax

Services of a Valuer - Ambit and scope of Consulting engineer services under service tax - Service provided to a client - Held that - The service provided by any qualified engineer in the area of insurance survey or loss assessment are not in the nature of services in an engineering discipline. Even as per the WTO classification of services, insurance survey and loss assessment is categorized as insurance auxiliary services and not as Consulting Engineer Services . It was accordingly clarified that the term Consulting Engineer as defined in the Service Tax Act, will not include those qualified engineers who act as insurance surveyor and loss assessor within its scope and therefore, service tax levy on the Consulting Engineer in any discipline of engineering will not cover the insurance survey and loss assessment services rendered by a qualified engineer. In the Institution of Valuers case (2013 (1) TMI 348 - GUJARAT HIGH COURT), the Hon ble High Court held that services rendered by a valuer whether it be by engineer or any other person, is not in relation to advice, consultancy or technical assistance in any one or disciplines of engineering and therefore, the services of valuers is not liable to service tax as Consulting Engineer - Decided in favour of assessee.

Summary

Issues:
Interpretation of liability for service tax on activities of a surveyor/loss assessor under the Insurance Act, 1938.

Analysis:
The appellant, an Engineer engaged in surveyor/loss assessor profession, was held liable for service tax by the Revenue. The issue revolved around whether the appellant's activities fell under the category of "Consulting Engineer" for service tax purposes. The lower appellate authority upheld the Revenue's decision, leading to the appellant's appeal.

The Ld. Superintendent (AR) representing the Revenue referred to a judgment by the Hon'ble High Court of Gujarat in the case of Institution of Valuers Vs. UOI, where it was decided in favor of the appellant. The Circular No. 34/2/2001-C dated 30/04/2001 clarified that services provided by qualified engineers in insurance survey or loss assessment do not fall under "Consulting Engineer Services." The Circular differentiated insurance survey and loss assessment as insurance auxiliary services, distinct from consulting engineering services. The High Court ruling in the Institution of Valuers case emphasized that services provided by valuers, including engineers, do not qualify as consulting engineering services for service tax purposes.

Considering the above, the Appellate Tribunal concluded in favor of the appellant. The impugned order was set aside, and the appeal was allowed with possible consequential relief as per the law. The decision was made based on the clarification provided in the Circular and the legal interpretation from the High Court judgment, ensuring that the appellant's activities as a surveyor/loss assessor did not fall under the scope of "Consulting Engineer" for service tax liability.

This judgment highlights the importance of precise classification and interpretation of services under the tax regime, ensuring that activities such as insurance survey and loss assessment by qualified engineers are distinguished from traditional consulting engineering services for the purpose of service tax liability.