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TMI Blog2005 (5) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... ll not help the case only to bring Pfizer under the coverage of the term 'person', it will not cast a liability of Consulting Engineer or Engineering Services having been provided. The period of demand in this case is 1997 to 2001. The insertion of sub-clause (iv) in Rule 2(1)(d) of the Service Tax Rules vide Notification 12/2002, dt. 1-8-2002 providing that in relation to taxable services provided by a person who is a non-resident or is from out side India, then the person receiving the Service shall be liable. Therefore, the demands made and determined as a liability on the appellants and consequence of penalty interest etc. are required to be held as misdirected. After perusal of the agreement on finding that the admitted position is the receipt of Technical know-how of patented process from the foreign company and payments for the same and for the Royalty cannot be fastened with Service Tax Liability. No contrary decision or provision from the Agreement entered into was shown to arrive at or differ from the Tribunals decision. The grant, as per the terms of the Agreement, is of a Licence to manufacture, provide Technical assistance including Training and permits the ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) for failure to get Registered under the Service Tax as an assessee and having failed to pay the Tax, liability for violation of the Service Tax Rules and penalties should not be determined and interest also not be recovered. 1.4 The Dy. Commissioner determined the Tax Demands along with interest and imposed penalties for breach of the Service Tax Law provisions. In appeal the Commissioner (Appeals) heard the application for waiver of the pre-deposit and the appeal together and dismissed the application and the appeal for contravention of Section 35F of the Central Excise Act, 1944 and on merits. 1.5 Hence this appeal. 2.1 After hearing both sides and considering the material it is found - (a) Pfizer the New York based company is admittedly engaged in the manufacture and marketing of medicaments and cannot be understood as an 'Engineering firm' by a common man. The perusal of the Agreement entered into, which has caused for the payments, reveals that the same Licences, with conditional rights, and cannot be considered to be tendering any service. The lower authorities have relied upon the stipulation in the Agreement to the effect that the appellants will bear the taxes. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered in the capacity of a consulting engineer. The scope of the services of a consultant may include any one or more of the following categories :- Feasibility report; Pre-design services project report; Basic design engineering; Detailed design engineering; Procurement; Construction supervision and project management; Supervision of commissioning and initial operation; Manpower planning and training; Post-operation and management; Trouble shooting and technical services, including established systems and procedures for an existing plant . A test in all these cases as set by the Supreme Court is the perception and understanding of the trade. It is respectfully submitted that Pfizer are universally recognized as a pharmaceutical company, and cannot be considered to be engineering firm . A perusal of the activities mentioned in the Trade Notice extracted above also indicates that neither the Appellants nor Pfizer would be considered as an engineering firm and consequently do not fall within the definition of Consulting Engineer . From a perusal of the list of services enumerated in the aforesaid trade notice and the application of the principle of ejusdem generis would lead to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner (Appeals) has failed to appreciate that for Service Tax to be payable, a service provider-client relationship has to exist, which is clearly not the case in the transaction between the Appellants and Pfizer. The term client is not defined under the Act and has to be examined as per its dictionary definitions. Client has been defined as : an individual, corporation, trust or estate that employs a professional to advice or assist it in the professional's include but are not limited to attorneys, accountants, architects etc. (Black's Law Dictionary) 'a person who engages the professional advice or services of another.' (Merriam Webster's Collegiate Dictionary) The dictionary meaning of the word 'client' thus suggest that a 'client' is a person who hires, engages or employs services of a professional. It is submitted that the Appellants have entered into a license Agreement with Pfizer, whereby Pfizer provides technical know-how to the Appellants. This cannot be construed as a client-consultant relationship, and therefore no Service Tax is payable on such a transaction. We find force in the agreements, the decision in the case of Tata Consulta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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