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TMI Blog2011 (4) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,22,18,110 under the category "Scientific or Technical consultancy" service rendered by it during the period 1-10-2001 to 31-3-2005 plus applicable interest. He also imposed penalties on the assessee under various sections of the Finance Act, 1994 (the Act) including an amount of Rs. 1,22,18,120 under section 78 of the Act. He appropriated an amount of Rs. 1,15,08,968 deposited by NGRI before adjudication of the show-cause notice. In the appeal filed before us, NGRI seeks to vacate the impugned demand and penalties whereas the revenue seeks to enhance the service tax on the ground that the Commissioner had wrongly allowed cum-tax benefit in computing the service tax due. 3. The facts of the case are that the officers of DGCEI received intelligence to the effect that NGRI working under organization M/s. Council of Scientific and Industrial Research, New Delhi did not pay service tax due on scientific and technical consultancy services rendered by it during the material period. 3.1 NGRI is an organization engaged in research in the field of Earth sciences. It conducts research in the areas of the projects of exploration of hydrocarbons, mineral exploration and engineering geophysi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RI completed the task of scientific data interpretation, preparation of various maps/charts etc., preparation of the technical report and submitted the same to NCAOR in April, 2006. This formed part of the final report prepared by NCAOR delineating the outer limits of the Indian Continental Shelf beyond the 200 nautical miles from the territorial sea base line. (b) M/s. ICI India Ltd., Hyderabad engaged NGRI for conducting geophysical study, which involved study of geophysical strata based on resistivity survey for understanding of geophysical strata of their factory. (c) M/s. Nuclear Power Corporation of India Ltd. (NPCIL) entrusted research project with NGRI for gathering micro earthquake data for installation of Micro earthquake Monitoring Station around Jaitapur Nuclear Power Plant site identifying it with reference to its latitude and longitude. (d) M/s. Hindalco Industries Ltd. placed order on NGRI for carrying out the following projects. Development of water quality database in the watershed covering Alumina plant (i) Detailed water quality analysis for trace metal and major ions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; The geological data, interpretation of space imagery, limited ground checks, statistical analysis and report containing the data helped GTIL to determine the design of the pipeline in safe and cost effective manner in seismically active areas. (k) M/s. Archeological Survey of India (ASI) engaged NGRI for conducting studies on the effects of vibration and noise due to vehicular traffic on Charminar. Based on the report of NGRI, the ASI carried out necessary repairs and development works in relation to the monument. (l) M/s. Indian National Centre for Ocean Information Services (INCOIS) entrusted NGRI to conduct geological and geophysical investigation for delineating subsurface structure and weak zones as well as conducting resistivity profile and sounding tests in the INCOIS site and adjoining area of the campus to delineate and lineaments favourable for ground water accumulation by deploying geophysical method. The finding of the research helped INCOIS to determine sub-surface structure and site characteristics for the construction of heavy structure and ground water potential in the campus. 3.3 After studying the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ......." Accordingly, he held that NGRI is liable for payment of service tax under scientific and technical consultancy for the services rendered by it as proposed in the show-cause notice. He held that the assessee had not filed returns and had taken registration only on 17-5-2008 as a provider of survey and exploration of minerals services. NGRI was guilty of suppression of facts. Accordingly, he invoked larger period under section 73 of the Act as proposed in the show-cause notice. He allowed cum-tax benefit in working out the service tax liability of the assessee. 4. In the appeal as well as during hearing, NGRI has argued that projects undertaken for various agencies listed in the show-cause notice were research projects. NGRI submitted report containing data as per the work order placed on it by its various clients. The activity undertaken by NGRI did not involve scientific or technical consultancy. NGRI had not rendered any technical advice as a result of the survey and research undertaken by it. The CBEC had clarified the scope of survey and map-making service as follows:- "1. Any service provided or to be provided to any person, by any other person, other than by an age ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered technical opinion following research to its clients. The assessee had initially taken registration in 2005 under 'Survey and Exploration of Mineral service'. NGRI had taken a different stand as regards the nature of the service rendered by it as the same was brought under tax net only from 16-6-2005. This was in order to avoid tax liability. The order of the Commissioner was in accordance with the legal provisions. He had correctly classified the services rendered by the assessee. The impugned order is liable to be sustained. 6. We have carefully considered the facts of the case and rival submissions. We note that under the various projects were undertaken by the assessee employing its qualified scientists. It gathered information on the sub-surface strata of earth which also showed effects of phenomena such as micro earthquakes by employing various scientific methods. We have carefully perused the work entrusted with the assessee by various entities/agencies, NGRI studied the profile of the sub-surface earth involving studies of ground water, effect of seismic activity etc. The data collected was put to use by the clients as it helped cost-effective laying of pipeli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompletion of the project by NGRI, without which we cannot decide if NGRI also provided scientific or technical consultancy to its clients. It does not transpire from the records if the outcome of the various projects was a scientific representation of the profile of the target strata of the earth in each case or the report also contained an expert advice in the nature of for instance, the most efficient subterranean route along which GTIL could lay the pipelines or effective remedial steps that could be taken to prevent further damage to the majesty of Charminar or the geographical location which will yield optimum quantity of Uranium on mining in the case of AMD. We note that the Commissioner has given a finding without substantiating the same that NGRI was engaged in provision of scientific or technical consultancy. In the circumstances, we remand the matter for a fresh decision by the Commissioner after studying the project reports generated on completion of research conducted by NGRI for its clients. Appeal No. ST/48/2009 8. In this appeal filed by the revenue, the revenue is aggrieved that the Commissioner had allowed cum-tax benefit in computing the tax liability of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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