Tribunal rules in favor of appellant on service tax liability for Business Auxiliary Service and Consulting Engineer Service.

The Tribunal ruled in favor of the appellant in a case concerning liability for service tax under 'Business Auxiliary Service' and 'Consulting Engineer Service.' The appellant's activities of cutting and packing for a client were deemed exempt from service tax under business auxiliary services as they related to agricultural produce. Additionally, the transfer of technical know-how did not qualify as Consulting Engineer Service based on precedents. The Tribunal set aside the demands for service tax under both categories, confirming the decisions on both issues on 08.03.2017.

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Issues:
1. Whether the appellant rendered 'Business Auxiliary service' and is liable for service tax.
2. Whether the appellant is required to pay service tax under Consulting Engineer service for the transfer of technical know-how.

Analysis:

Issue 1: Business Auxiliary Service Liability
The appellant carried out cutting and packing activities for a client, which the Revenue argued fell under business auxiliary service. The demand for service tax was contested by the appellant, citing exemption notifications and circulars. The Counsel argued that the activities were exempt under circulars and previous tribunal decisions. The Revenue contended that the activities did not qualify for exemption as they were not related to agricultural produce. The Tribunal referred to a previous case involving similar activities and held that the processing of vegetables for a client in relation to agriculture is not liable for service tax under business auxiliary services. The demand under 'Business Auxiliary Service' was set aside.

Issue 2: Consulting Engineer Service Liability
Regarding the demand for service tax under Consulting Engineer Service for transfer of technical know-how, the appellant argued that the technical know-how did not fall under this category based on various tribunal decisions. The Tribunal agreed with the appellant, citing precedents that transfer of technical know-how does not constitute Consulting Engineer Service. The demands confirmed under this category were also set aside based on previous tribunal decisions.

The Tribunal allowed the appeals, setting aside the impugned orders and confirming the decisions on both issues. The judgments were pronounced in court on 08.03.2017.

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