2004 (8) TMI 713 - Commissioner - Service Tax

Appeal allowed due to natural justice violation, service reclassified as Intellectual Property Service.

In Re : Kaveri Telecom Products Limited

In Re : Kaveri Telecom Products Limited - 2006 (1) S.T.R. 226 (Commr. Appl.) Issues involved:1. Denial of principles of natural justice in deciding the issue without a personal hearing.2. Lack of discussion on the issue in the findings.3. Classification of the service provided by the appellant under Engineering Consultancy Service or Intellectual Property Service for the relevant period.Analysis:1. The appellant challenged the findings of the adjudicating authority on the ground of denial of principles of natural justice as the issue was decided without a personal hearing. The adjudicating authority failed to consider the appellant's reply to the show cause notice and did not provide a finding on whether the services rendered by the appellant fell within the purview of Consulting Engineer Services. The absence of a personal hearing and failure to address crucial aspects rendered the Order-in-Original liable to be set aside.2. Another ground of challenge was the lack of discussion on the issue in the findings. The appellant argued that the sale of technology should be classified under Intellectual Property Service, which was not subject to service tax during the relevant period. The Commissioner noted the merit in the appellant's contention and agreed that the technology sale did not fall under Engineering Services but rather under Intellectual Property Services. This lack of discussion on the issue further supported setting aside the Order-in-Original.3. The main issue revolved around the classification of the service provided by the appellant under Engineering Consultancy Service or Intellectual Property Service for the period in question. The Commissioner found that the sale of technology by the appellant to another entity should be appropriately classified under Intellectual Property Services, which was not taxable during the relevant period. This classification was crucial in determining the liability for service tax. Consequently, the Order-in-Original was set aside, and the appeal was allowed with consequential relief.This comprehensive analysis of the judgment highlights the key issues raised by the appellant, the shortcomings in the adjudicating authority's decision, and the final determination regarding the classification of the service provided by the appellant, resulting in the appeal being allowed.