ATLANTA Vs. CCE

JUDGEMENT

(1.) One of these appeals is by the assessee and the other by the Revenue, both directed against the same order of the Commissioner (Appeals). In the impugned order, Id. Commissioner (Appeals) upheld a demand of service tax of Rs. 3,27,253/ - confirmed against the assessee by the original authority for the period 01.07.1997 to 31.03.2000, but set aside the penalty imposed on the party by the lower authority. The present appeal of the assessee is against the demand of service tax, while the Revenue's appeal challenges the dropping of penalty.

(2.) Examined the records and heard both sides. It is submitted by the Counsel for the assessee that, during the material period, they had undertaken building construction works for their customer and that no taxable service was involved in such activity. It is, however, admitted that the amounts of Rs. 4,000/ -, Rs. 53.624/ - and Rs. 55,175/ - were paid towards service tax for the periods 1997 -98, 1998 -99 and 1999 -2000 respectively. Ld. Counsel clarifies that these payments were made on the consideration collected by the assessee from their customers for technical advice rendered during the respective periods. Ld. Counsel also states that the above payments were made voluntarily. It is, however, argued that no tax was levaible during the period of dispute on the service connected with soil test. According to ld. Counsel, this service became taxable for the first time under Clause 106 of Section 65 of the Finance Act, 1994, which Clause was inserted by the Finance Act, 1994, which Clause was inserted by the Finance Act, 2003. Counsel has argued that 'construction service' was not a taxable service before insertion of Clause 30(a) under Section 65 ibid. This clause was inserted under the Finance Act, 2004. Ld. DR submits that the service rendered by the assessee in this case were covered by the definition of "Consulting Engineer Service" under Clause 90 of Section 65 ibid with Clause 25 thereof.

(3.) I have considered the submissions. Clause 25, cited by Ld. DR, reads as under : "Consulting Engineer means any professionally qualified engineer or an engineering firm who, either directly or indirectly ,renders any advice, consultancy or technical assistant in any manner to a client in one or more disciplines of engineering." The above definition indicates that it is the advice, consultancy or technical assistant rendered by a "Consulting Engineer" that are liable to be taxed under the Finance Act, 1994. Any amount collected by the Consulting Engineer towards cost of construction of any building cannot be brought within the purview of "advice, consultancy or technical assistance". Admittedly, the assessee in this case is a Civil Engineer functioning under the name and style of "Atlanta". Any service rendered by him by way of "advice, consultancy or technical assistance" to his clients will be taxable. The orders of the lower authorities do not disclose as to what amount or amounts were collected by the assessee towards fee for "Advice, consultancy or technical assistant" from their clients during the material period. This requires to be worked out by the original authority and any demand of service tax quantified accordingly.