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TMI Blog2024 (8) TMI 1337X X X X Extracts X X X X X X X X Extracts X X X X ..... ant includes providing consultancy or advice, assistance in mergers acquisition of companies, conducting due diligence under specific situations/transactions, conducting health check or diagnostic reviews, evaluation financial viability of a transaction amongst others. Rather, the nature of services rendered by the appellant, it can be rightly classified under the category of Management or Business Consultants Services. The word management signifies ways and means for managing the organization, by any means i.e. by directions or by regulations or by administration. The word direction indicates framing of policy and the word regulation or administration indicates the standard operating procedure to be followed for achievement of the policy. The demand of Rs.1,27,90,193/- has been confirmed considering that the services are to be classified under the practicing Chartered Accountant Services and the Market Research Agency s Services; but it has not been quantified in the impugned order as to how much is the demand under each category; therefore, the impugned order is bad classifying the services rendered by the appellant under the category of Chartered Accountant Services and the Mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereunder with intent to evade payment of tax. Interest and penalty - HELD THAT:- When the demand of service tax itself is not sustainable, therefore, the question of interest and penalty does not arise. The impugned order is not sustainable in law and is set aside - appeal allowed. - SH. S. S. GARG, MEMBER (JUDICIAL) AND SH. P. ANJANI KUMAR, MEMBER (TECHNICAL) Present for the Appellant: Sh. Vikash Agarwal Sh. Bikash Gupta, CAs Present for the Respondent: Sh. Siddharth Jaiswal, Sh. Aneesh Dewan Sh. Yashpal Singh, Authorized Representatives ORDER The present appeal is directed against the impugned order dated 29.11.2019 passed by the Commissioner of Central Goods Service Tax, Faridabad, whereby the learned Commissioner has confirmed the demand of service tax based on the allegations levelled in the show cause notice dated 20.04.2012 to the extent of Rs.4,51,56,323/- along with levy of interest and penalty. 2.1 Briefly stated facts of the present case are that the appellant is a registered company under the Indian Companies Act, 1956 and is registered with the Service Tax Department. The appellant is engaged in provision of 'Management Consultancy Services and accordingly has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. He further submits that the said service is covered under Rule 3(3) of the Export of Service Rules, 2005 and hence qualifies as export of service. Therefore, the service tax is not payable on the consideration received for rendering of such services to foreign recipients. He further submits that the nature of services provided by the appellant does not fall under the taxable category of CA Services or Market Research Services. He also submits that the appellant renders a combination of services with the prime aim of financial projections which involved advice, consultancy and technical assistance in arriving at project costs, financial projections, sensitivities etc. The market analysis is a part of the entire process and not an independent service provided by the appellant to their client. Therefore, the services rendered by the appellant are more appropriately classifiable under Management Consultant Services. 4.3 The learned Consultant further submits that the appellant does not render CA Service and the services rendered by the appellant are not similar to services rendered by the Chartered Accountant Firm. In this regard, he submits that the services which are rendered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.5 The learned Consultant further submits that the services rendered by the appellant are appropriately classifiable under Management or Business Consultants Services which have wrongly been classified under Chartered Accountancy Services and 'Market Research Agency's Services . Further, he refers to definitions of 'management consultant' as it stood during the impugned period from 31.08.2006 to 31.05.2007 and from 01.06.2007 onwards till date and submits that the service rendered by the appellant squarely falls under consultancy or technical assistance in relation to financial management under Management Consultants Services . He further submits that the service provided by the appellant pertains to assistance in organizing and systematizing an organization or effectiveness of its management and therefore, it is clearly covered under the inclusive portion of definition of management consultant. He further submits that the service cannot be classified under two categories of taxable services. In this regard, he refers to Section 65A of the Finance Act and submits that submits that the service can be categorized only under one head which is more specific and which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unication in the form of reports which have been periodically sent by the appellant to PwC Overseas located outside India. He further submits that this issue is no more res integra and has been settled in catena of judgments. In this regard, he relies on the following judgments: CST Vs B.A. Research India Ltd. 2010 VIL 01 Muthoot Fincorp Ltd. Vs CCE, Vishakhapatnam - 2009, 23 STT 475 (Bang CESTAT) National Engg. Industries Ltd. Vs CCE, Jaipur - 2008 (11) STR 156 (Tri. Delhi) Microsoft Corporation (India) Private Limited Vs Commissioner of Service Tax vide order number ST/A/53737/2014-CU(DB) CESTAT New Delhi Microsoft Corporation (India) Vs CCE, Delhi in Appeal Nos. ST/57239-57240/2013 CESTAT Chandigarh Vodafone Essar Cellular Vs CCE, Pune - 2013-TIOL-566-CESTAT-MUM Gap International Sourcing (India) Pvt Ltd - 2014-TIOL-465-CESTAT-DEL M/s Paul Merchants Itd. Vs. CCE, Chandigarh - 2013 (29) STR 257 (Tri. Delhi) 4.7 The learned Consultant further submits that the demand has been erroneously computed as the appellant has not been given the benefit of cum-tax demand. He further submits that the Department has confirmed the service tax demand of Rs.1,27,90,193/- under the category of CA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Apex Court in the case of Padmini Products Vs Collector of C.Ex. 1989 (8) TMI 80. He also submits that the adjudicating authority in para 17 of the impugned order has acknowledged the fact that the entire demand of service tax is based upon the details supplied by the appellant itself; hence, the question of suppression cannot be alleged. In support of his submissions, he relies on the following case laws on limitation: Lakshmi Engg. Works Vs CCE 1989 (44) ELT 353 by the Supreme Court as 1991 (55) ELT A33 (SC) Pushpam Pharmaceuticals Company Vs CCE 1995 (78) ELT 401 (SC) Anand Nishikawa Co Ltd Vs CCE 2005 (188) ELT 149 (SC) Continental Foundation Joint Venture Holding Vs CCE 2007 (216) ELT 177 (SC) 4.11 As regards penalty under Section 78 of the Finance Act, 1994, the learned Consultant submits that the said penalty cannot be imposed because the appellant entertained a bona fide belief that services provided by them are appropriately classified and covered under export of service during the impugned period. 5.1 On the other hand, the learned AR for the Revenue reiterated the findings of the impugned order and filed the written submissions. The learned AR submits that the servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tered Accountants of India and is holding a certificate of practice granted under the provisions of the Chartered Accountants Act, 1949 (38 of 1949) and includes any concern engaged in rendering services in the field of chartered accountancy. 7. Further, we find that as per Section 2(2) of the Chartered Accountants Act, 1949, a member of the institute shall be deemed to be in practice , when individually or in partnership with chartered accountants in practice, if he, in consideration of remuneration received or to be received i. engages himself in the practice of accountancy; or ii . offers to perform or performs services involving the auditing or verification of financial transactions, books, accounts, or records or the preparation, verification or certification of financial accounting and related statements or holds himself out to the public as an accountant; or iii . renders professional services or assistance in or about matters of principle or detail relating to accounting procedure or the recording, presentation or certification of financial facts or data; or iv . renders such other services as, in the opinion of the Council, are or may be rendered by a chartered accountant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to how much is the demand under each category; therefore, the impugned order is bad classifying the services rendered by the appellant under the category of Chartered Accountant Services and the Market Research Agency s Services. 12. As regards export of services, we find that the appellant has entered into contract/agreement with PwC Overseas Network Firms and not with the clients of PwC Overseas Network Firms under which the appellant provides services, which can either be provided from the premises of the appellant or any other place as agreed with PwC Overseas Network Firms. The privity of contract arises between the appellant and PwC Overseas Network Firms and not between the appellant and the clients of PwC Overseas Network Firms, because the PwC Overseas Network Firms have separate agreement with its clients. 13. Further, we are of the opinion that the issue whether the services provided by the appellant to the Foreign Network Firms and other Foreign Companies for a consideration collected in convertible foreign exchange would be qualified for export services under Export of Services Rules, 2005 or otherwise is no more res integra and has been settled by the Hyderabad Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... livered outside India and the same is used outside India. These facts also fortify the views taken herein-above that the service provided by appellant was export of service and I am inclined to hold such taxable service as export of service and therefore not taxable. Similarly, it has been consistently held by the Tribunals/Courts in the cases relied upon by the learned Consultant for the appellant as cited supra, that if the service is provided by a person in India is consumed and used by a person abroad, it has to be treated as export of service. 14. Further, we find that in this case the show cause notice was issued on 20.04.2012 and the reply was filed by the appellant on 10.07.2012, but the impugned order was passed on 29.11.2019 i.e. after seven years of issuance of show cause notice. It has been consistently held by the Tribunals/Courts that the Adjudicating Authority is required to pass the order within time as prescribed under Section 73(4B) of the Finance Act, 1994; but in the present case, the same was not passed within time. Therefore, in view of the ratios of the decision of Hon ble Delhi High Court in the case of Sunder System Pvt Ltd (supra) and the decision of Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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