TaxTMI 
TaxTMI 
2006 (8) TMI 21
X X X X Extracts X X X X
X X X X Extracts X X X X
....for the above said services rendered. Show Cause Notice was issued to demand the Service Tax along with interest and also proposed to impose penalty. The adjudicating authority, vide impugned order held that the service provided by the appellants falls under the category of "Practicing Chartered Accountant" and confirmed and demanded Service Tax of Rs. 1,39,079/- along with interest and imposed penalty of Rs. 100/- per day under Section 76 and Rs. 1,06,041/- under Section 78 of the Finance Act, 1994. Service Tax of Rs. 33,038/- along with interest of Rs. 4,681/- already paid by the appellant was also appropriated. Aggrieved by the impugned order, the appellant have filed this appeal inter alia, on the following grounds. The activities re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....round that these are taxable services of accounting provided by a practicing chartered accountant in his professional capacity and Notification No. 59/98-ST. dated 16-10-1998 includes such a service of accounting for attracting levy of Service Tax on professional services of a practicing chartered accountant. 2. The appellant on the other hand contended that the services provided to M/s. MESCOM were in the nature of Business Auxiliary Service, that the services were not provided by him in his professional capacity as a practicing chartered accountant and that the service actually done was limited to maintaining ledger accounts of billing related activity which did not amount to professional accounting service of a practicing chartered ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rvice in terms of Section 65[105J[s]. 5. I further observe that the work allotted to appellant was capable of being allotted to persons other than a chartered accountant which implies that the work is not one requiring hiring of a chartered accountant for his professional skills of accounting. Provisions relating to termination of contract at one month's notice and termination following computerisation of ledgers, the fact that both chartered accountants and non-chartered accountants were paid similar service charges etc. goes to establish that contract is for outsourcing the work of ledger maintenance and billing and not for hiring a chartered accountant for his specialised professional skills of accounting which involved application of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed with some force that services rendered by him was that of book keeping/ledger maintenance for area specified in the contract and not of professional accounting by a Chartered accountant which has a different scope and meaning. 10. I find from the written submission and extracts from a text book on Accountancy by B.S. Raman, furnished at the time of personal hearing, by appellants in other cases of appeal involving similar facts and issues, that book keeping/ledger maintenance though an essential part of accounting process, cannot by themselves amount to a professional service of accounting offered by a practicing chartered accountant. Book keeping or ledger maintenance is the process of recording business transactions in appropriate b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ons limited to the area of billing, recoveries, etc and generated relevant MIS and DCB statement. These statements and reports do not amount to a balance sheet for M/s. MESCOM. I therefore come to a conclusion that senders provided by the appellant to M/s. MESCOM do not amount to a professional service of accounting provided by a practicing chartered account and accordingly did not attract Service Tax liability in terms of Notification No. 59/1998-ST. I also hold that ledger maintenance is only an ingredient and process of professional accounting, which involves several other stages and processes resulting in production of a balance sheet for the client. The work of ledger maintenance by a practicing chartered accountant did not attract Ser....