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TMI Blog2008 (1) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... L.C. for recording the electricity meter reading and ledger maintenance relating to billing activities on behalf of M/s. MESCOM. The Revenue considered that these activities were carried out by the Chartered Accountants independently in their professional capacity and such activity comes under the category of "Practicing Chartered Accountant". Hence the Service tax demand has been raised along, with Education Cess. After due consideration, the Original authority confirmed the interest and penalty. However the Commissioner (Appeals) after due consideration noticed that the Respondents, Chartered Accountants were carrying out the ledger maintenance work in terms of the contract and that services rendered are not a professional service of accounting rendered by a Practicing Chartered Accountants. The finding recorded in one of the Order-in-Appeal No.241/2006-C.E. dated 2-8-2006 at Paragraphs 10 to 13 of the order is reproduced herein below "10. I find from the written submission and extracts from a text book on Accountancy by B.S. Raman, furnished at the time of personal hearing, that book keeping/ledger maintenance though an essential part of accounting process, cannot by themselves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work of ledger maintenance by a practicing Chartered Accountant did not attract Service tax under Notification No. 59/1998-S.T. 12. I find that the appellant had got himself registered under the classification of Business Auxiliary Services for purpose of discharging Service tax liability on remuneration received from M/s. MESCOM for providing ledger maintenance service as per contract with effect from 1-7-2003 and has discharged liabilities accordingly. The adjudicating authority has vide the order impugned disallowed the declaration filed by appellant under Business Auxiliary Service classification and has proposed to adjust amounts already paid against liabilities confirmed now without assigning any reason for disallowing the declaration. 13. In view of the above discussion, I set aside the impugned order confirming liability of Service tax and other consequential liabilities under the classification of services of Practicing Chartered Accountant for services of ledger maintenance rendered to M/s. MESCOM in terms of the contract on the ground that services rendered are not a professional service of accounting rendered by a Practicing Chartered Accountant. I also set aside tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Chartered Accountant's plea of levy of Service tax on them. He also refers to the judgment of the High Court of Gujarat at Ahmedabad rendered in the case of Chartered Accountants Association v. Union of India [2006 (2) S.T.R. 300 (Guj.) = 2005 (179) E.L.T. 129 (Guj.)] which also upheld the levy of Service tax on the Chartered Accountants. He also refers to the Madras High Court's judgment rendered in the case of Indian Institute of Architects v. Union of India [2006 (2) S.T.R. 393 (Mad.) = 2002 (139) E.L.T. 245 (Mad.)] which also upheld the levy of Service tax on the Chartered Accountants and the Architectures. 4. The learned Counsels appearing for the Respondents contended that they are not challenging the constitutional validity and the levy of Service tax under the category of 'Practicing Chartered Accountants'. It is the submission that the part of contract entered into by MESCOM is not the activity of 'Practicing Chartered Accountants' as the present activity is done by non-professional Chartered Accountants also. It is merely clerical work of non-professional employees who were employed on contract basis. They were covered under the various Labour Legislations such as Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 'Practicing Chartered Accountants'. He refers to the finding given by the Madras High Court rendered in the case of Indian Institute of Architects (supra) and points out that the Chartered Accountants had discharged the Service tax voluntarily under the category of "Business Auxiliary Service". 8. The learned Counsel contends that in these appeals, the Revenue has proceeded to consider the activity under the category of 'Practicing Chartered Accountants' and not under the category of 'Business Auxiliary Service'. It is also pointed out that the Commissioner (Appeals) in the impugned order has also overruled the Revenue's contention to bring the activity within the ambit of 'Business Auxiliary Service'. 9. On a careful consideration of the submissions made by both the sides, I notice that the citations relied on by the learned DR pertains to constitutional validity of levy of Service tax on the Chartered Accountants and Architectures. This point has not been adjudicated in these appeals and what the point adjudicated is about specific contract entered into by the MESCOM to carry out the activity of outsourcing of meter reading, billing and maintaining ledger account on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with their grammatical variations and cognate expressions shall be construed accordingly. Pursuant to clause (iv) above the Council has resolved that in its opinion the services that may be rendered by a Chartered Accountant in practice includes: (a) the entire range of Management Consultancy Services. (b) in his professional capacity (and neither in his capacity nor in his capacity as an employee), acts as a liquidator, trustee, executor, administrator, arbitrator, receiver, adviser or representative of costing, financial or taxation matters or takes up an appointment made by the Central Government or a State Government or a Court or law or any other legal authority or acts as Secretary unless his employment is on a salary-cum-full time basis. The Council has clarified the scope of the expression "Management Consultancy Services" as follows: 'Management Consultancy Services' shall not include the functions of statutory or periodical audit, tax (both direct taxes and indirect taxes) representation or advice concerning tax matters or acting as liquidator, trustee, executor, administrator, arbitrator or receiver, but shall include the following. (i) Financial management planni ..... X X X X Extracts X X X X X X X X Extracts X X X X
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