2025 (11) TMI 773 - AT - Service Tax

Survey and map-making services limited to raw results; expert opinions deemed consultancy, matter remanded for quantification and limitation

CESTAT AT held that survey and map-making service (SMM) is restricted to presenting plain results, but where experts provide specific opinions or ... Classification of service - Scientific or Technical Consultancy Service (STC) or Survey and Map Making Service (SMM) - services rendered by a scientific research institution in the form of surveys, data acquisition, processing and reporting - whether on furnishing the reports, any expert opinion or technical advice given to clients in addition to factual data/map, etc., based on such study or services carried out by them? - time limitation - HELD THAT:- While the service of SMM is restricted to carrying out survey and making maps and presenting the plain result of the same, however, in the same context, if any specific expert view or definite opinion, etc., are given by an expert or technocrat of this field, then it would not be covered under SMM. There is no dispute that NGRI is an expert body and for giving any opinion or advice, they have to carry out various surveys, map making, data analysis, etc., using various tools, techniques and technical expertise, which would result in plain data and the map. However, when certain specific opinion and advice are also given, based on said plain data, map and other parameters, etc., noticed during such survey and map making, then it can not remain covered within the scope of SMM. Where the survey is of prime importance, a survey report or a map based on such survey would not have any element of any expert opinion. The reliance on the case law of Halliburton Offshore Services Inc. Commissioner of S.T, Mumbai [2014 (10) TMI 167 - CESTAT MUMBAI] is distinguished on facts, as in that case it was held that survey was only exploration as they had not analysed any data collected by them, which is not the case here, as in the present appeal it is already held that some of their reports involved elements of consultancy, technical advice, expert opinion, etc., and therefore, the facts are distinguished. Time limitation - HELD THAT:- It is found that while adjudicating authority complied with the order of the Tribunal in so far as substantive issue on merit was concerned, however, he has not given any findings on the plea of limitation, as directed by Tribunal in their order dt.24.07.2012. While various grounds have been taken by appellant that there was no deliberate intent or malafide on their behalf and therefore, in the absence of the same, extended period cannot be invoked, no view expressed on these arguments including the order of the Hon’ble High Court of Telangana in the case of National Remote Sensing Agency [2021 (6) TMI 679 - TELANGANA HIGH COURT], as relied upon by appellant leaving this issue open. The matter remanded to the adjudicating authority to quantify the demand based on merit of the case first, keeping in view the findings, relating to 11 projects and thereafter, examine the issue of limitation keeping in view the grounds cited and case laws relied upon and specially their being a government constituent. Appeal allowed partly by way of remand. 1. ISSUES PRESENTED AND CONSIDERED 1. Whether services rendered by a scientific research institution in the form of surveys, data acquisition, processing and reporting are classifiable as 'Scientific or Technical Consultancy' (STC) or as 'Survey and Map Making' (SMM) under the statutory definitions. 2. Whether elements of 'consultation, advice or technical assistance' exist in the deliverables (reports, maps, recommendations) so as to attract STC rather than SMM. 3. Whether the extended limitation period under the proviso to section 73 is properly invocable against a government/scientific institution for the relevant period, and whether the adjudicating authority complied with the Tribunal's remand direction to decide limitation. 2. ISSUE-WISE DETAILED ANALYSIS Issue A - Classification: STC versus SMM Legal framework: Two statutory service definitions framed the analysis: (a) STC defined as 'any advice, consultancy, or scientific or technical assistance ... by a scientist or technocrat or science/technology institution ...', and (b) SMM defined as 'geological, geophysical or any other prospecting, surface, sub-surface or aerial surveying or map-making of any kind, but does not include survey and exploration of mineral.' A ministry clarification elaborating STC was also treated as guiding scope: STC covers consultation, expert opinion/advice on feasibility, recommendations for improvement, technology suggestions, and consultation on technical problems. Precedent treatment: The parties relied on various coordinate bench decisions; the Tribunal considered and distinguished an authority relied on by the appellant where surveying was held not to involve data analysis (Halliburton style reasoning). That authority was distinguished on factual matrix because several projects here involved analysis, interpretation and recommendations. Other co-ordinate bench decisions cited by the appellant were considered but not mechanically followed; emphasis was placed on factual matrix in each project. Interpretation and reasoning: The Tribunal applied a functional test focused on the presence or absence of expert opinion/advice beyond mere presentation of surveyed data. Key analytical steps: (i) identify whether deliverable was plain data/maps only or included interpretative conclusions, recommendations or design guidance; (ii) determine whether those conclusions were of an expert/technical nature that could reasonably be characterized as consultancy; (iii) where such expert conclusions existed, classify the service as STC notwithstanding that surveys and data-generation preceded the advice. The Tribunal noted that a scientific institution's performance of surveys and data processing is not ipso facto SMM - the determinative factor is whether the product contains expert opinion/technical advice based on the data. Ratio vs. Obiter: Ratio - the legal test established is that SMM covers plain survey and map-making outputs, but where an expert supplies definite opinion, recommendations or technical advice based on the survey/data, the service falls within STC. Obiter - remarks distinguishing particular past authorities on their facts and some factual characterisations of individual projects that do not establish broad precedent. Conclusions (classification of the eleven projects): Applying the functional test to the projects, the Tribunal concluded as follows: - Projects classified as SMM (mere survey/map output without expert recommendations): Project 1 (extended continental shelf mapping; fixed point determination) and Project 4 (heliborne magnetic survey with data set/report where no detailed technical opinion was given). (These were held to be survey/map making.) - Projects classified as STC (survey plus expert interpretation/advice/recommendation): Projects 2 (resistivity survey with recommendations on boreholes and groundwater actions), 3 (micro-seismic monitoring with conclusions relevant to plant stability), 5 (heliborne survey with interpretation and identification of targets and recommendations for ground checks), 6 (pipeline studies with specific design-related advice regarding faults/lineaments and design strengthening), 7 (vibration/noise study with remedial suggestions), 8 (site-characterisation with recommendations regarding borehole suitability), 9 (magneto-telluric/geothermal study with site-specific recommendations and further study suggestions), 10 (lakes ecology study with clear recommendations on restrictions and protective measures), and 11 (hydrogeological and contamination study with expert findings and implications). Cross-reference: The Tribunal expressly differentiated factual situations where data collection alone was the end product from those where data was processed into actionable technical opinions; reliance on earlier authority holding surveys non-consultative was distinguished where here interpretative outputs existed. Issue B - Extended limitation (proviso to section 73) and remand compliance Legal framework: Section 73 prescribes limitation for issuing notices; the proviso permits extended period in cases of suppression of facts or failure to file returns, subject to proof of requisite elements. A remand by the Tribunal and subsequent rectification directed the adjudicating authority to consider all issues raised by the assessee, including limitation. Precedent treatment: The Tribunal reviewed its own remand order and a subsequent rectification of mistake directing that the adjudicating authority, in re-adjudication, address limitation as well as the substantive issues. The Tribunal relied on that internal rectification to require a fresh decision on limitation. Interpretation and reasoning: The Tribunal found that the adjudicating authority in the remand proceedings did not record any findings on the plea of limitation despite the Tribunal's explicit direction (rectified remand order) that limitation be considered. The Tribunal observed that invocation of the proviso requires evidence of suppression or failure to file returns; mere status as a government or public sector organisation does not automatically exclude the extended period but may be relevant to suppression analysis. Ratio vs. Obiter: Ratio - where a remand expressly or implicitly requires consideration of limitation, the adjudicating authority must examine and record findings on the limitation plea; failure to do so warrants further remand. Obiter - discussion of whether government status negates suppression or extended limitation was left open and not finally decided. Conclusions and directions: The Tribunal (a) remanded the matter to the adjudicating authority to quantify demand in accordance with the Tribunal's classifications of the eleven projects (STC vs SMM); (b) required the adjudicating authority thereafter to examine and decide the limitation issue (proviso to section 73) in light of pleaded grounds and authorities, giving the assessee opportunity to be heard; and (c) left open any final conclusion on invocation of extended limitation against a government constituent, expressly reserving consideration of arguments and case law on suppression and government status to the adjudicating authority. The Tribunal granted partial relief by way of remand and clarified that final demand, if any, is contingent on the adjudicating authority's decision on limitation.