Service tax exemption for consulting engineers to international organisations was denied for the pre-2002 period.

Consulting engineering services rendered to the United Nations Development Programme for the period before 2-8-2002 were held not to qualify for exemption from service tax under the then-applicable notification framework. Notification No. 16/2002-ST operated only from 2-8-2002 and replaced the earlier regime, while Notification No. 43/1998 did not exempt consulting engineers merely because the services were supplied to the United Nations or another international organization. The exemption claim for the prior period was therefore rejected, and pre-deposit of the service tax was directed, with stay of penalties made conditional on compliance.

---

---

Issues: Whether consulting engineering services provided to the United Nations Development Programme for the period prior to 2-8-2002 were exempt from service tax so as to justify waiver of pre-deposit.

Analysis: The dispute related to services rendered during 1999 to 2002. The exemption available under Notification No. 16/2002-ST dated 2-8-2002 applied only from that date and superseded Notification No. 48/1998 dated 28-4-1998. For the relevant prior period, Notification No. 43/1998 dated 28-4-1998 governed the field and did not grant exemption to consulting engineers merely because services were provided to the United Nations or an international organization.

Conclusion: The claim for exemption was rejected for the impugned period, and the appellant was directed to pre-deposit the service tax amount, with consequential stay of penalties on compliance.

---