Appellate Tribunal rules in favor of appellants, setting aside service tax demand. Services not consulting, no tax evasion.

The Appellate Tribunal ruled in favor of the appellants, setting aside the service tax demand. It was determined that the services provided did not fall within the scope of Consulting Engineer Service as the appellants were engaged to execute works based on client-provided designs, not to provide consultancy. The Tribunal also found that there was no evidence of intent to evade tax or suppression of facts, rendering the allegation unsubstantiated. Additionally, it was acknowledged that companies were not covered under the Consulting Engineer category during the relevant period, further supporting the appellants' position.

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Issues:
Service tax demand confirmation against the appellants for supervision charges collected during a specific period under Consulting Engineer Service category without payment.

Analysis:
The appellants contested the service tax demand, arguing that the charges were for executing works based on specifications provided by the client and not within the scope of Consulting Engineer Service. They highlighted that no wilful misstatement or suppression of facts occurred on their part.

The Appellate Tribunal analyzed the agreement between the parties and found that the appellants were engaged to execute works based on designs provided by the client, not to provide advice or consultancy as required under Consulting Engineer Service definition. The service rendered did not fall within the scope of Consulting Engineer Service.

Regarding the invocation of the extended period, the Tribunal noted that mere non-registration, non-filing of returns, or non-payment of tax are insufficient to prove suppression of facts. There must be evidence of intent to evade tax, which was not established in this case. The allegation of suppression of facts was deemed unsubstantiated.

The appellants also argued that during the relevant period, companies were not covered under the Consulting Engineer category, citing various judgments supporting this claim. The Tribunal agreed that before the relevant amendment, companies were not included in the definition of Consulting Engineer. As the demand period predated the amendment, the appellants, being a company, were outside the scope of Consulting Engineer Service.

In conclusion, the Tribunal found the impugned order unsustainable and allowed the appellant's appeal, setting aside the service tax demand.

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