2022 (11) TMI 340 - AT - Service Tax

Levy of service tax - Architect service or not - designing, planning, Architecture and Site Supervision of construction work - It was argued that the Architect service was brought into tax net with effect from 16.10.1998 whereas the appellant took registration only on 22.07.2003 - extended period of limitation - HELD THAT - The appellant had paid an amount of Rs 1 Lac vide challan dated 22.09.2003 and the demand SCN was issued for Rs. 01,02,948/- after adjusting Rs 1 Lac already deposited by the appellant. It is noticed that the SCN nowhere alleges suppression or misdeclaration on the part of the appellant and therefore, there cannot be any ground for invocation of extended period of limitation. In this circumstance, the demand for extended period of limitation cannot be sustained. It is not in dispute that the appellant is not registered under section 23 of the Architect Act, 1972. Learned AR had argued that the appellant as commercial concerns is engaged in providing services in the nature of designing ,planning, Architecture and site supervision. It is apparent that without proper registration no one can provide services in the field of Architecture. Thus, the allegation that the appellant is providing services of Architect is unsubstantiated. Appeal allowed.

Summary

Issues Involved:
Demand of service tax, interest, and penalties on the appellant for alleged provision of architect services without proper registration under the Architects Act, 1972.

Analysis:

1. Demand of Service Tax and Penalties:
The appeal was filed against the demand of service tax, interest, and penalties on the appellant for allegedly providing architect services without being registered under the Architects Act, 1972. The appellant, registered as a Consulting Engineer, argued that they were not engaged in architect services as they were not registered under section 23 of the Architects Act, 1972. The appellant highlighted that the demand was made for a period prior to their registration as a service provider, and the extended period of limitation was not invoked in the show cause notice (SCN). The appellant contended that there was no suppression or misdeclaration on their part, and hence, penalties under section 78 of the Finance Act, 1994 should not be imposed.

2. Definition of Architect under Section 65 of the Finance Act, 1994:
The Tribunal examined the definition of an architect under Section 65 of the Finance Act, 1994, which includes any person registered under the Architects Act, 1972, and any commercial concern engaged in providing architectural services. It was noted that the appellant was not registered under section 23 of the Architects Act, 1972, which raised doubts about their eligibility to provide architect services. The appellant's argument that they were engaged in designing, planning, architecture, and site supervision, which did not amount to architect services, was supported by the statement of the appellant firm's proprietor. The Tribunal concluded that the appellant's activities did not fall under the definition of architect services as per the relevant legal provisions.

3. Decision and Conclusion:
After considering the submissions from both parties, the Tribunal found that the demand for the extended period of limitation was not sustainable as there was no evidence of suppression or misdeclaration by the appellant. The Tribunal also noted that the appellant was not registered under the Architects Act, 1972, and their activities did not constitute architect services as defined under the Finance Act, 1994. Therefore, the demand was set aside, and the appeal was allowed in favor of the appellant. The judgment was pronounced in open court on 01.11.2022 by the members of the Tribunal.

In summary, the judgment by the Appellate Tribunal CESTAT Ahmedabad addressed the issue of demand of service tax, interest, and penalties on the appellant for allegedly providing architect services without proper registration. The Tribunal ruled in favor of the appellant, setting aside the demand as the appellant was not registered under the Architects Act, 1972, and their activities did not qualify as architect services under the relevant legal provisions.