COMMISSIONER OF CENTRAL EXCISE Vs. RAI AND ASSOCIATES

JUDGEMENT

(1.) IN all these appeals the revenue is challenging the order of the Appellate Tribunal which has held that the impugned activity carried on by the Chartered Accountants do not fall within the definition of Section 2(2) of the Chartered Accountants Act and therefore, they are not liable to pay any service tax in terms of the show cause notice.

(2.) THE material on record discloses that the dispute between the parties is whether the assesses offered their services in their professional capacity of practicing chartered accountants and if the services offered amounted to professional services of accounting liable to attract service tax in terms of Notification No. 59/1998 ST. THE lower authorities have held that the relationship between the assessee and M/s. MESCOM is not that of practicing chartered accountants and a client but that of an agent and his principal. THE service so provided therefore does not fit into the description of taxable service in terms of Section 65(105)(s). THE contract is for outsourcing the work of ledger maintenance and billing and not for hiring a chartered accountant for his specialized professional skills of accounting which involved application of principles and procedures of accounting which cannot be dispensed with on account of computerization of ledgers and which cannot be attended by persons other than a chartered accountant. THE services were neither offered nor provided as a professional service of accounting attracting service tax liability in terms of Notification No. 59/1998 ST by attracting classification under category of services provided by a practicing chartered accountant. THErefore, the first appellate authority set aside the order confirming the 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. It is that order which was appealed before the Tribunal which also rightly dismissed the same. While dismissing the appeal the Appellate Tribunal has set out the definition given in the Chartered Accountant Act, 1949 and on an elaborate consideration of the statutory provisions and the material on record has held that the activity of outsourcing of meter reading, billing and ledger posting which was an activity to be done by the respective companies does not come within the ambit of the professional activity of chartered accountant. THE three companies had put sourced the work to other private parties also who were not chartered accountants. THE employees were not getting trained as chartered accountants under the Chartered Accountants Act. THEy were unskilled personnel without qualifications and were only doing manual work. THE employees were covered under the various labour legislations such as Contract Labour (Regulation and Abolition Act, 1970) and Minimum Wages Act. THErefore, it held the order passed by the Commissioner (Appeals) is correct and do not call for any interference.

(3.) IN that view of the matter, these appeals are rejected as not maintainable reserving liberty to the Revenue to approach the Apex Court. The High Court registry is directed to return the certified copies of the orders produced, to the Department, to prefer the appeal. Appeal dismissed.