METZELER AUTOMOTIVE PROFILES Vs. CCE

JUDGEMENT

(1.) Appellant filed this appeal against the order in appeal passed by the Commissioner (Appeals). In this case, the demand of service tax is confirmed on the ground that the appellants were charging design and development charges from their customer. The lower authorities treated the appellant as consulting engineer.

(2.) The contention of the appellant is that they are manufacturing components such as weather strips and for the manufacture of weather strips, they are manufacturing toolings. They are charging from their customer for the design and development tools and these tools in some cases were sold to their customer on payment of appropriate excise duty as well as sales tax and where the tools were not sold to their customer, the cost of tools are included in the cost of the final product at appropriate excise duty and sales tax is being paid. The contention of the appellant is that they are not covered under the definition of consulting engineer as provided in section 65(31) of the Finance Act, 1994. The contention is that as per the provision of the Finance Act the consulting engineer means any professionally qualified engineer or an engineering 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. The contention of the appellant is that they are not providing any direct or indirect technical assistance to their customer. In fact, they themselves are developing and manufacturing the tools, which are ultimately used in the manufacture of final product and cost of tools, are added to the cost of the final product on which the excise duty has been paid.

(3.) Contention of the revenue is that in their balance sheet they are mentioning the amounts received from their customer as design and development charges. On the basis of this, the demand was confirmed that they were providing service treating as a consulting engineer.