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TMI Blog2014 (10) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... notice demanding service tax of Rs. 28,12,221/- for the period 25.01.2001 to 08.02.2002 was issued. The adjudicating authority confirmed the demand under the service of Real Estate Agent holding that the service was provided in India and chargeable to service tax in terms of the provisions of Rule 6(1) of the Service Tax Rules, 1994. In appeal, Commissioner (Appeals) agreed with the classification under Real Estate Agent service but set aside the demand of tax holding that the services were mainly provided offshore and only some peripheral activities such as visit of personnel to the site were performed in India and other attendant expenses on communication and temporary structure facilities were incurred in India and therefore service tax is not leviable. Revenue is in appeal against the order. 3. We have gone through the written submissions and heard both sides. 4. Learned Counsel for the respondent i.e. Ms. Mekhla Anand draws our attention to the Agreement for program management services between M/s. Sahara and M/s. Bechtel stating that the Agreement provides for overall management and administration of the entire Sahara Amby Valley project by M/s. Bechtel as well as managing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; (ii) Pre-design services/project (iii) Basic design Engineering (iv) Detailed design Engineering (v) Procurement (vi) Construction supervision & project management. (vii) Supervision of commissioning and initial operation. (viii) Manpower planning and training. (ix) Post-operation and management. (x) Trouble shooting and technical services, including establishing systems and procedures for an existing plant Though the above list is not exhaustive, it illustrates the wide scope and nature of the services rendered by a consulting engineer" to justify that the service is classifiable under Consulting Engineer Services". 4.1 They also places reliance on judgements in the case of Nokia (I) Private Ltd. Vs. Commissioner of Customs, Delhi 2006 (1) STR 233 (Tri. - Delhi) and Commissioner of Central Excise, Shillong Vs. Rabindra Das, 2003 (158) E.L.T. 487 (Tri. - Kolkata) to support their contention that what they are providing is Consulting Engineer's Service. According to them, the service they provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STR 3 (SC), according to them the liability if any, is on Sahara. 6. Revenue's contention is that Article -1 of the Agreement itself refers to development of India's first planed hill city spread over 5000 acres to create a premium real estate environment at Amby Valley in India. According to Ld. DR, the scope of the service provided by Bechtel is within the parameters of definition of Real Estate Consultant Revenue's contention in appeal papers is that there should be no distinction in law between peripheral and other services in relation to taxable services and as long as some services are performed in India, they will be liable to service tax. In the present case in accordance with Articles I & II of the Agreement, some services have been rendered in India by way of the visits of the engineers and officials to the project site in India for which direct costs are reimbursed to Bechtel and therefore taxable. 7. We have carefully considered the submissions of both sides and examined the matter. The first issue to be decided is whether Bechtel had provided service in relation to Real Estate Agent or under Consultant Engineer Service. The exact scope of service provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices on a quarterly basis, or as otherwise mutually agreed." 8. Real Estate Services is defined under Section 65(105) (v) as "service provided or to be provided to any person, by a Real Estate Agent in relation to real estate". Under Section 65(88) "Real estate agent" means a person who is engaged in rendering any service in relation to sale, purchase, leasing or renting, of real estate and includes a real estate consultant. Under sub clause (89) Real Estate Consultant "means a person who renders in any manner, either directly or indirectly, advice, consultancy or technical assistance, in relation to evaluation, conception, design, development, construction, implementation, supervision, maintenance, marketing, acquisition or management, of real estate". Section 65 (105) (g) defines Consulting Engineer's service as service "to any person, by a consulting engineer in relation to advice, consultancy or technical assistance in any manner in one or more disciplines of engineering including the discipline of computer hardware engineering. Explanation: For the purposes of this sub-clause, it is hereby declared that services provided by a consulting engineer in relation to advice, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the technical expertise involved in technical design engineering, procurement, supervision, manpower planning software systems, software development as mentioned in detail in Appendix A to the Agreement and as also stated in Board's letter dt. 2.7.1997 (supra). 9. It would be relevant to note the decision in the case of Nokia (I) Pvt. Ltd. (supra) which discusses activities such as design aspects of training of personnel operation and maintenance service under the scope of Consulting Engineer Service. We also agree with the contention of the appellant that the Consulting Engineer Service more specifically describes the service provided by them and is the correct classification in terms of Section 65A (2) (a) for determination of classification. And in any case, if doubt still remains as to the correct classification between the two services in question which equally merit consideration, then by virtue of Section 65A (2) (c), the Consulting Engineer Service is preferred because it appears first among the sub-clauses that is, at Section 65 (105) (g), as compared to the sub-clause of Real Estate Service that is Section 65 (105) (v). 10. In view of discussion above and Board' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices provided from outside India to a recipient in India. The period in the present case is Jan. 2001 to Feb. 2002 and therefore Revenue has not built any case in their favour. As we have observed, the matter was put to rest w.e.f. 18.4.2006, from which date only, the service tax is leviable in such cases. 14. We note that Revenue has viewed the visits of personnel in India and their peripheral activities as resulting in service provided in India. It is undisputed that appellants did not have a business establishment in India. However, the legal frame work as it existed during the material period has also not been appreciated by Revenue. The adjudicating authority held Bechtel liable to tax in view of proviso to Rule 6(1). As per second proviso to Rule 6(1) of Service Tax Rules 1994. "In case of a person who is a non resident or is from outside India does not have any office in India and is liable to pay Service Tax on taxable services provided in India. i) the service tax thereon shall be paid by such person or in his behalf by any other person authorized by him, who shall submit to the Commissioner of Central Excise in whose jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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