2013 (11) TMI 404 - AT - Service Tax

Manufacturer of TV sets providing consulting services through debit notes liable for service tax.

The appellant, a manufacturer of television sets, was found to have provided taxable service as consulting engineers by issuing debit notes for technical ... Consulting Engineers Service – Failed to apply for Registration and pay duty - Extended Period of Limitation - Revenue was of the view that the appellant had provided the taxable service as consulting engineers and received consideration from the service recipients but failed to discharge the service tax liability – Held that:- The debit notes on service indicate that the appellant had collected charges for providing technical services towards supervision, of production indicating that technical consultancy services were provided in respect of production. Relying upon TATA CONSULTANCY SERVICES versus UNION OF INDIA [2001 (4) TMI 1 - HIGH COURT BANGLORE] - In the case of a service provided by consultant engineers, the taxable service is a service provided directly or indirectly in the nature of advice, consultancy or technical assistance in any manner and relating to any disciplines of engineering - whether the service is provided by an individual, a partnership firm or a company is inconsequential and the definition of the expression 'consulting engineer' would include a company - The petitioner had rendered taxable service as 'consulting engineer' but failed either to obtain registration, file returns or remit its tax liability – thus, invocation of the extended period of limitation and the order of assessment confirming demand of service tax, interest and penalty are impeccable – Decided against Assessee. Issues:1. Whether the appellant provided taxable service as consulting engineers.2. Whether the appellant failed to discharge the service tax liability.3. Whether the extended period of limitation was correctly invoked.4. Whether the appellant's defense was valid.5. Whether the appellate authority's decision was appropriate.Analysis:1. The appellant, a manufacturer of television sets, received amounts for consulting engineers services. The Revenue alleged that the appellant provided taxable service as consulting engineers but failed to discharge the service tax liability. A notice was issued for non-disclosure of tax liability, invoking the extended period of limitation.2. The appellant claimed it was not a consulting engineer but a manufacturer of television sets. The Manager stated that the appellant provided technical consultancy services, not consulting engineers services. However, the adjudicating authority confirmed the service tax demand, interest, and penalty, citing precedents from Karnataka and Calcutta High Courts.3. Debit notes raised by the appellant indicated charges for technical services provided to service recipients, supporting the Revenue's claim of providing technical consultancy services. The appellant's consultant reiterated arguments rejected by the authorities, emphasizing the appellant's non-qualification as a consulting engineer.4. The Karnataka High Court clarified that the definition of 'consulting engineer' includes companies providing technical services, rejecting the appellant's contention. The Calcutta High Court also supported this interpretation. The consistent view of both courts and analysis of the appellant's activities led to the conclusion that the appellant provided taxable service as a consulting engineer.5. Considering the precedents, the facts of the case, and the debit notes, the appellate authority's decision to confirm the demand for service tax, interest, and penalty was upheld. The appeal was dismissed without costs, as the order under appeal did not warrant interference based on the circumstances and legal interpretations provided.