Tribunal grants waiver on Service Tax pre-deposit, rejects "Consulting Engineer" classification.

The Tribunal ruled in favor of the appellant, granting a waiver of the pre-deposit of the entire Service Tax amount and penalty. The Tribunal rejected the Departmental Representative's contention that the mere supply of drawings and designs constituted "Consulting Engineer" activity, emphasizing it was not a matter of service classification. The appellant's argument that the activity did not meet the criteria for "Consulting Engineer" and the exemption under the CBEC Circular for services provided outside India before 2006 were considered valid, leading to the stay on tax liability during the appeal process.

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Issues:
1. Whether the activity of mere supply of drawings and designs falls under the category of "Consulting Engineer" for imposing Service Tax.

Analysis:
The case involved the appellant obtaining designs and drawings for modernizing their plant, leading to a show-cause notice proposing Service Tax as "Consulting Engineer" activity. Initially dropped, the Commissioner later upheld the demand, considering the designs for a specific project as falling under "Consulting Engineer." The appellant argued against this classification, citing a precedent where mere supply of designs was not deemed as such. Reference was made to a CBEC Circular exempting services beyond Indian territorial waters from Service Tax before 2006. The appellant sought a stay on the tax liability.

The advocate for the appellant contended that the activity did not meet the criteria for "Consulting Engineer," emphasizing the lack of professional advice and technical help provided directly to customers, as per the definition. Additionally, the appellant highlighted the exemption under the CBEC Circular for services provided outside India before 2006, suggesting no liability for Service Tax in this case. The appellant requested a stay on the tax liability during the appeal process.

After hearing both parties, the Tribunal focused on determining whether the mere supply of drawings and designs constituted "Consulting Engineer" activity, rather than a matter of service classification. Dismissing the argument for a classification issue, the Tribunal rejected the contention raised by the Departmental Representative. Acknowledging a strong prima facie case in favor of the appellant, the Tribunal granted a waiver of the pre-deposit of the entire Service Tax amount and penalty, staying the recovery during the appeal period.

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