Tribunal overturns service tax demand pre-2004 for consulting engineers. Fresh decision ordered. The Tribunal set aside the demand for service tax in the category of 'consulting engineers service' for a period before 10.9.2004, related to a payment ...
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Tribunal overturns service tax demand pre-2004 for consulting engineers. Fresh decision ordered.
The Tribunal set aside the demand for service tax in the category of 'consulting engineers service' for a period before 10.9.2004, related to a payment made for technical know-how transfer to a German company. Citing relevant judgments, the Tribunal remitted the case for a fresh decision, directing the adjudicating authority to reconsider the matter in light of the mentioned judgments and provide the assessees with a fair opportunity to present their defense. The appeal was allowed, and the impugned order was overturned on 11.9.2009.
Issues: Challenge to demand of service tax in the category of 'consulting engineers service' for the period prior to 10.9.2004 on consideration paid for transfer of technical know-how.
Analysis: The appeal challenges the demand of service tax in the category of 'consulting engineers service' for a period before 10.9.2004, concerning the payment made by the assessees to a German company for technical know-how transfer for manufacturing 'onload tap changers' in India. The contention raised is that the assessees made a one-time royalty payment without receiving technical assistance, thus not liable for service tax under 'consulting engineer's service'. It is argued that liability for service tax on technical know-how transfer from abroad to India arose only post 10.9.2004. The Tribunal considers this argument in light of judgments from the Hon'ble Bombay High Court and Delhi High Court, namely Indian National Shipowners Association Vs. Union of India and Unitech Ltd. Vs. Commissioner of Service Tax, New Delhi, respectively. In light of these judgments, the impugned order is set aside, and the case is remitted for fresh decision to the adjudicating authority. The authority is directed to pass fresh orders after considering the mentioned judgments and providing a reasonable opportunity for the assessees to present their defense, leaving all issues open for fresh decision.
The Tribunal, in its decision, sets aside the impugned order and allows the appeal by way of remand. The operative portion of the order was pronounced in open court on 11.9.2009.
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