Consulting Engineer service can cover software advisory and implementation work for service tax purposes.

Technical advice and consultative work connected with software installation and implementation was treated as Consulting Engineer service under the Finance Act, 1994. The reasoning noted that the service category was not limited to traditional engineering disciplines and could extend to engineering techniques applied to management and software-related functions. A separate exemption notification for software-related consulting engineer services was also viewed as indicating that such services could fall within the service tax net. On that basis, advisory and consultative services by software engineers were brought within the taxable category and the service tax demand was upheld.

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Issues: Whether the services rendered by software engineers could be treated as Consulting Engineer service and subjected to service tax under the Finance Act, 1994.

Analysis: The dispute turned on the character of the activities undertaken in connection with software business applications. The reasoning accepted that, apart from sale or licensing of software, the appellant carried out advisory and consultative functions in relation to installation and implementation of software in industries and companies. It was also noticed that the scope of consulting engineer service was not confined to traditional branches such as mechanical, electrical, or civil engineering, and that engineering techniques could extend to management and software-related applications. The issuance of an exemption notification for software-related consulting engineer services was treated as supporting recognition that such services could fall within the service tax net.

Conclusion: Software engineers rendering advisory and consultative services were held to fall within the ambit of Consulting Engineer service. The demand of service tax was upheld against the assessee.

Ratio Decidendi: Services involving technical advice and consultation in software development and implementation can constitute Consulting Engineer service for service tax purposes.

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