Tribunal rules in favor of respondent in tax dispute case, citing Circular and service tax exemption

The Tribunal ruled in favor of the respondent in a tax dispute case. Firstly, the activity undertaken by the respondent was not classified as 'Consulting Engineer service' as argued by the Revenue, based on a Circular issued by CBEC. Secondly, the commission received for liaison activity provided to a foreign client was considered an export of service and thus exempt from service tax. The Tribunal dismissed the Revenue's appeal in both instances, upholding the decisions of the Commissioner (Appeals) in favor of the respondent.

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Issues:
1. Classification of activity as 'Consulting Engineer service'
2. Tax liability on commission received for liaison activity

Classification of activity as 'Consulting Engineer service':
The appeal was filed by the Revenue against the order of the Commissioner (Appeals) who held that the activity undertaken by the respondent did not fall under the category of 'Consulting Engineer service'. The Revenue argued that the installation and commissioning of machinery by the respondent required technical assistance, making it qualify as 'consulting engineer service'. They cited a Board's Circular and a previous Tribunal decision in support of their argument. The respondent, on the other hand, contended that the installation and commissioning services were not covered under 'consulting engineer service' as per a Circular issued by CBEC. The Tribunal noted that the Circular clarified that installation and commissioning were not considered 'consulting engineer service' before a certain date. As this Circular was not considered in the previous Tribunal decision cited by the Revenue, the Tribunal found no merit in the Revenue's case and ruled in favor of the respondent.

Tax liability on commission received for liaison activity:
Regarding the commission received by the respondent for liaison activity provided to a foreign client, the Revenue argued that it should be subject to service tax. However, the respondent maintained that this commission was for liaison activity provided abroad and thus qualified as an export of service, exempt from service tax. The Tribunal agreed with the respondent, stating that the service provided to the foreign client fell under the category of export of service, and therefore, upheld the decision of the Commissioner (Appeals) that the service was not liable for service tax. Consequently, the Tribunal found no merit in the Revenue's appeal and dismissed it.

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