By TIOL News Service

NEW DELHI, JUNE 04, 2014: THIS is a Revenue appeal.

A SCN was issued demanding Service Tax of Rs.17,85,768/- alleging that the assessee had provided ‘Consulting Engineer' service during the period 2001-03.
In response, the assessee inter alia submitted -

+ Rs.1,40,26,960/- is the consideration received for having provided the activity of soil testing, survey work, drilling survey to the National Highways Authority of India and this consideration falls outside the ambit of "consulting engineer" service.

+ Amount of Rs.90,03,799/- received by way of reimbursement of expenses for providing the "consulting engineer" service are liable to be excluded i.e. an amount of Rs.90,03,799/-.

+ Service tax liability, if any, is remittable by the principal consultants, namely Louis Berger Inc. and Scott Wilson Kirkpatrick India Pvt. Ltd.

+ Since the assessee was a company registered under the Companies Act, 1956, it was outside the ambit of the definition of "consulting engineer" which includes only a "consulting engineering" firm; that only with effect from 1.5.2006 Section 65(31) was amended to bring within the ambit of the definition "any body corporate".

The Joint Commissioner was in no mood to listen to all this and so he confirmed the demand with penalties et al.

The Commissioner (A) allowed the appeal by holding: (a) that soil testing and survey work services provided by the assessee were outside the scope of "consulting engineer" service; (b) since the assessee had provided service as an associate consultant to principal consultants, a service provided not to a client but to another consultant, the activity falls outside the specified taxable service and is not liable to tax as consulting engineer" service. (c) reimbursement of expenses received by the assessee is deleted from the taxable value under provisions of Section 67 of the Act.

As mentioned, Revenue is in appeal before the CESTAT against this order.

There was nothing for the Revenue representative to submit except the appeal itself.

The respondent adverted to the High Court decisions in Turbotech Precision Engineering Pvt. Ltd. 2010-TIOL-498-HC-KAR-ST and Simplex Infrastructure & Foundry Works 2013-TIOL-441-HC-DEL-ST to buttress their contention that since the assessee is a company registered under the provisions of Companies Act, 1956, it falls outside the purview of the definition of "consulting engineer" as the provisions stood during the relevant period 2001-03. Inasmuch as prior to 1.5.2006, "consulting engineer" was defined to mean any professionally qualified engineer or any other firm who either directly or indirectly renders any advice, consultancy or technical assistance in any manner to a client in one or more disciplines of engineering and it was only with effect from 1.5.2006 that Section 65(31) was amended to bring within the ambit of the definition of "consulting engineer" any body corporate.

Holding that in the light of the cited decisions the respondent/assessee fell outside the purview of the definition "consulting engineer" during the relevant period 2001-03, the Revenue appeal was dismissed.

(See 2014-TIOL-936-CESTAT-DEL)