Appellant not liable for service tax as payment not received for services rendered

The Tribunal found that the appellant's services did not fall under the definition of Consulting Engineer Services during the relevant period. The appellant's argument that they had not received a portion of the payment was accepted, and it was held that service tax liability arises only upon receipt of payment for services rendered. The Tribunal referred to the definition of Consulting Engineer and a relevant High Court judgment to support its decision. Consequently, the impugned order was set aside, and the appeal was allowed.

---

---

Issues:
- Whether the appellant is liable to pay service tax under Consulting Engineer Services for the period January 1998 to March 2002.

Analysis:
The appeal was filed against an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Mumbai-II. The issue revolved around the service tax liability of the appellant amounting to Rs. 4,39,226 under Consulting Engineer Services for the mentioned period. The appellant had received consideration from two foreign entities for transfer of technology in the pharmaceutical field. The appellant argued that they had not received a portion of the payment and, therefore, should not be liable to pay service tax. The lower authorities confirmed the demand, but the appellant contended that they should only be liable for service tax upon receipt of payment for services rendered. The appellant also argued that their services did not fall under the definition of Consulting Engineer Services as they were not an Engineering Firm or professionally qualified engineer. The Tribunal noted that during the relevant period, the definition of Consulting Engineer required the person to be a professionally qualified engineer or an Engineering firm. The appellant's services of transferring technical know-how in pharmaceutical and bulk drugs did not fall under this definition. The Tribunal referred to a judgment by the High Court of Karnataka to support this interpretation. The Tribunal held that the impugned order was unsustainable, set it aside, and allowed the appeal with consequential relief, if any.

In conclusion, the Tribunal found that the appellant's services did not fall under the definition of Consulting Engineer Services during the relevant period. The appellant's argument that they had not received a portion of the payment was accepted, and it was held that service tax liability arises only upon receipt of payment for services rendered. The Tribunal referred to the definition of Consulting Engineer and a relevant High Court judgment to support its decision. Consequently, the impugned order was set aside, and the appeal was allowed.

---