2017 (11) TMI 402 - AT - Service Tax

Consulting Engineering Service - Assessee s grievance is that it was a mere supervisor and not a Consulting Engineer who supervised the erection and commissioning of the mills - Held that - When any service is provided to a client by Consulting Engineer in relation to advice, consultancy or technical assistance in any manner in one or more disciplines of engineering, the service provider shall be called as Consulting Engineer - There is no material on record to show that there was any erection work carried out by appellant. Documents placed depicts that appellant was supervisor to provide technical assistance for the purpose of erection and installation - demand upheld. Penalty - Held that - there was nothing suppression of any fact made by appellant and it was only an interpretational error which should not press the appellant to suffer penalty - penalty set aside. Appeal allowed in part.

Summary

Issues:
1. Whether the appellant provided Consulting Engineering Service or was merely a supervisor during the erection and commissioning of mills.
2. Whether the tax demand on the appellant for Consulting Engineering Service is justified.
3. Whether the penalty imposed on the appellant should be upheld.

Analysis:
1. The appellant contended that they were a supervisor and not a "Consulting Engineer" during the erection and commissioning of mills. They argued that the consideration received for supervising should not be taxable as Consulting Engineering Service. The appellant relied on a Board's Circular to support their claim. However, the Revenue argued that the appellant did provide Consulting Engineering Service and was correctly taxed under this category. The Tribunal examined the documents and found that the appellant's role was that of a supervisor providing technical assistance for erection and installation, not carrying out any erection work. The Tribunal agreed with the Revenue's classification, dismissing the appellant's appeal against the tax demand.

2. The Tribunal clarified that a Consulting Engineer provides advice, consultancy, or technical assistance in engineering disciplines. Since there was no evidence of the appellant carrying out erection work, their role as a supervisor providing technical assistance fell under Consulting Engineering Service. Therefore, the tax demand on the appellant was deemed justified, and their appeal was dismissed.

3. Regarding the penalty imposed on the appellant, the Tribunal disagreed with the Revenue. They noted that there was no suppression of facts by the appellant, and any discrepancies were due to interpretational errors rather than intentional misconduct. As a result, the Tribunal dismissed the Revenue's appeal seeking a penalty, granting relief to the appellant. Consequently, the appellant's appeal was also disposed of, with both parties not succeeding in their respective appeals.

This judgment clarifies the distinction between a supervisor and a Consulting Engineer in the context of taxation, emphasizing the nature of services provided and the criteria for classification under Consulting Engineering Service.