2007 (3) TMI 157 - AT - Service Tax

Tribunal rules in favor of appellant, reclassifies training activity as 'Commercial Training'; cites legal misapplication.

The Tribunal ruled in favor of the appellant, setting aside the Commissioner's order that classified the training activity as 'Consulting Engineer.' The ... Consulting Engineer - Revenue contended that appellant activity of conducting training to government customers on projects sponsored by the UNICEF taxable under 'Consulting Engineer' - Held that revenue contention was not correct and demand set aside Issues:1. Whether the activity of conducting training to government customers on projects sponsored by UNICEF falls under the category of 'Consulting Engineer' as per Clause 31 of Section 65 of Finance Act 1994.2. Interpretation of the activity under the heading of 'Commercial Training and Coaching Services' with respect to the relevant period.3. Application of Tribunal rulings and Board's Circular in determining the classification of the activity.Analysis:1. The appeal challenges the Order-in-Original categorizing the training activity as 'Consulting Engineer.' The Tribunal rejected the appellant's argument that the training did not involve services of professionally qualified engineers. The learned Consultant cited a Tribunal case where training was distinguished from 'Consulting Engineer' services, emphasizing a separate category for 'Commercial Training or Coaching Services.'2. The learned JDR supported the classification under 'Consulting Engineer' based on the Board's Circular. However, the Tribunal noted that the activity in question predates the establishment of the heading 'Commercial Training and Coaching Services.' Referring to the cited case, the Tribunal concluded that the training activity did not qualify as 'Consulting Engineer' services as it did not involve providing advice, consultancy, or technical assistance in engineering disciplines.3. The Tribunal referenced various judgments, including Chennai Telephone v. CCE and others, to support its decision that the training activity did not align with 'Consulting Engineer' services. The Tribunal found the Commissioner's order incorrect and set it aside, granting the appeal with consequential relief. The Tribunal highlighted the inconsistency in the Commissioner's decision compared to Ministry instructions and previous rulings, emphasizing the incorrect application of the law.This detailed analysis of the judgment highlights the dispute over the classification of the training activity and the Tribunal's reliance on precedents and legal interpretations to determine its categorization under relevant provisions of the Finance Act 1994.