2015 (9) TMI 737 - AT - Service Tax

Consulting Engineer service - assistance in finalising the kind of a ship - whether the services rendered by the appellant to Union Territory of Lakshadweep during the period 26/02/1999 to 26/01/2004 would amount to services rendered by a consulting engineer - Held that - Appellant had been engaged by the Union Territory for finalising vessels/ships for movement of men and material from the island to mainland, overseeing of the progress of construction of the vessel and also undertook the tests that require to be done on the various machinery parts of the ship. - The appellant herein is not a consulting engineer. They are experts in the shipping business and were called upon by the Union territory of Lakshadweep to assist them in finalising the kind of a ship that may be required for movement of men and material from island to mainland. Secondly, a similar issue, as to whether a private limited company registered under the Companies Act gets covered under the definition of consulting engineer during the period in question was decided by the Hon ble High Court of Delhi in the case of Simplex Infrastructure and Foundry Works(2013 (5) TMI 336 - DELHI HIGH COURT) - the impugned order which upholds the service tax liability with interest and penalties imposed is unsustainable and liable to be set aside - Decided in favour of assessee.

Summary

Issues:
- Whether the services rendered by the appellant to Union Territory of Lakshadweep amount to services rendered by a consulting engineer during a specific period.

Analysis:
1. The appeal challenged an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), LTU, Mumbai, regarding tax liability under 'Consulting Engineer's Service'.

2. The appellant assisted the Union Territory of Lakshadweep in finalizing the acquisition of a ship, overseeing vessel construction progress, and conducting necessary tests, which the Revenue authorities deemed taxable under 'Consulting Engineer's Service'.

3. The appellant contended that, being a company incorporated under the Companies Act, they did not fall under the definition of a 'consulting engineer' as per relevant laws, citing precedents supporting their stance.

4. The Departmental Representative supported the lower authorities' findings.

5. The core issue was whether the services provided by the appellant to the Union Territory of Lakshadweep qualified as those of a consulting engineer during the specific period.

6. The definition of 'consulting engineer' under Section 65(31) of the Finance Act, 1994 was crucial, requiring a professionally qualified engineer or an engineering firm to render advice or technical assistance, which the appellant did not meet.

7. The argument that the appellant, being experts in the shipping business, should be classified as a consulting engineer was dismissed, citing the need for a professionally qualified engineer or an engineering firm to fall under this category.

8. The judgment referenced a High Court decision that clarified the definition of 'consulting engineer' during the relevant period, emphasizing that a private limited company like the appellant did not fit within this definition.

9. Following the High Court's precedent, the Tribunal ruled in favor of the appellant, holding that the tax liability imposed was unjustified and unsustainable, leading to the setting aside of the impugned order.

10. Consequently, the appeal was allowed, and the impugned order was set aside, providing the appellant with consequential relief, if applicable.