AI Drafter 
TaxTMI 
TaxTMI 
2015 (12) TMI 222
X X X X Extracts X X X X
X X X X Extracts X X X X
....s Ltd., the hotel business of 'Regent Hotel' was acquired by the appellants. An agreement was entered between the appellants, LHL and ICICI Trustship Services Ltd., as ICICI was ready to pay the loans of various other parties payable by LHL to the tune of Rs. 331 crores for settlement of repayment of loans and transaction of transfer of the ownership right to the appellants. Therefore, as per the agreement, the share of the ICICI Trustship Services Ltd., was 80.1% and the share of the appellant was 19.9% and new Company was formed and named as 'Taj Lands End Ltd.' As per the said agreement, the appellants have taken over the activities of the hotels such as develop, conduct, operate, manage, renovate, modernize and carry out all activities of incidental and anciliary business to the business of hotelering or otherwise. As per the said agreement, M/s LHL was entitled for share of the profit on the basis of gross operational profits. 3. After going through the agreement in detail and various clauses thereof, the department was of the view that the activity undertaken by the appellant falls under the category of 'Management Consultancy Service'. Therefore, a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....j Lands End" w.e.f. 10,9.2002. With effect form 1.4.2006, Taj Lands End ltd. merged with Appellant pursuant to Hon'ble Bombay High Court's order dated 9.3.2007. 7. In support of the above contentions of the appellant, ld. counsel submits as under:- (A) The expression 'licensing agreement'/'license fees' is misnomer, as it was a takeover of the Regent Hotel owned by LHL by the Appellant and hence, it is a sale and purchase transaction which could have been concluded on disposal of sundry creditors, transfer of shares, etc. It is a settled position of law that the substance of the agreement is to be considered and not the wordings used in the agreement based on the Hon'ble Supreme Court judgment in the case of Bhopal Sugar [(1977) 3 SCC 147]. (B) Various clauses, which are reproduced in all the three Agreements, would substantiate that it is a case of purchase of Regent Hotel from LHL through the processing of purchase of shares from the then share holders of LHL by the Appellants (IHCL) and Trust i.e ICICI Trusteeship Service. The terms of the agreement and the surrounding circumstances would clearly evidence that it was a case of purchase of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uisition Agreement dated 9.9.2002 and name of hotel was changed from 'Regent Hotel' to 'Taj Lands End'; ii) that Appellants also acquired the company M/s. Lokhandwala Hotels Ltd. and changed the name of the company to 'Taj Lands End Ltd.' and held 19.9% share capital in the same and remaining 80.1% share capital was held by a Trust i.e. ICICI Trusteeship Services Ltd., which was unde control of Appellants; iii) that after acquisition of hotel business of 'Regent Hotel', ownership of assets/property in the said hotel continued with M/s.Lokhsandwala Hotels Ltd., hence Appellants entered into License Agreement dated 9.9.2002 with M/s. Lokhandwala Hotels Ltd. For acquiring the assets/property on rental basis for conducting their hotel business therefrom; iv) that running operating and managing 'Taj Lands End' by Appellants is covered under the category of Appellants' owned business with assets taken on rental basis from Lokhandwala Hotels Ltd. As far as Appellants' managed hotels is concerned. Appellants have been paying service tax under the head 'Management Consultancy Service' while Appellants' owned business, whet....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... held in the following cases, which is not so in the present case; a) Nirulas Corner House Pvt. Ltd. - 2009 (14) STR 131 (T) b) Telephone Cables Ltd. - 2007 (7) STR 657 (T) c) AISCO Engg. Pvt. Ltd. - 2006 (1) STR 324 (T) xi) the substance of the Agreement has to be taken into account to understand the true relation based on Hon'ble Supreme Court judgment in the case of Bhopal Sugar Inds. [(1977) 3 SCC 147] (para 5 & 6) and once the substance of agreement is considered, the purpose and object of the agreement is very clear i.e. that of managing of its own hospitality business with assets taken on rent from Lokhandwala Hotels Ltd.; xii) that without prejudice to the submissions on merits, if at all, it is considered as Appellants provided operational or administrative assistance in any manner to Taj Lands End Ltd., then such operational or administrative assistance has been made taxable under the head 'Business Support Service' vide Section 74 of the Finance Act, 2011, and the said amendment is prospective w.e.f. 1.5.2011. Thus, such operational or administrative assistance was not taxable during the disputed period i.e. 31.10.2002 to 31.3.2006 hence, the d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....given during the investigation period from March 2005 to December 2005 based on which only the impugned show cause notice has been issued. g) that the details, documents and information, that was required for issuing the show cause notice was provided by December 2005, while show cause notice has been issued after an inordinate delay of 2 years and four months from the date of submission of requisite documents, in which case, Dept. is not justified in invoking extended period based on the following judgments: i) Kushal Fertilisers (P) Ltd. - 2009 (238) ELT 21 (SC) ii) Orissa Bridge & Construction Corpn. Ltd. - 2011 (264) ELT 14 (SC) h) The facts of take over of Hotel of LHL by the Appellants was published in various papers in Business Line, on one of the hotel industry website also the said information was disclosed/reflected in their financial statement through Director's Report and these all evidence that there was no suppression or withholding of any information by the Appellants with any intent to evade payment of tax, hence, extended period is not invocable based on the following judgments: i) Hindalco Industries - 2003 (161) ELT 346 (T) ii) Kirloskar Oil....
X X X X Extracts X X X X
X X X X Extracts X X X X
....R 455 (Bom)]. After having considered Hon'ble Kerala High Court judgment in Krishna Poduval supra, it has been held by the Hon'ble Punjab & Haryana High Court that penalty under Section 76 & 78 could not be imposed simultaneously, in the following cases: i) Cool Tech Corpn. - 2011-TIOL-23-HC-P&H ii) Pannu Property Dealers - 2011 (24) STR 173 (P&H) (H) Ld. AR relying upon few lines of Agreement in his support would not be correct, as, each of the said three Agreements have to be read in toto and not in isolation. With these submission, he prayed that the impugned order is required to be set aside on both counts, merits as well as on time bar. Consequently, penalties are also not imposable on the appellant. 8. On the other hand, ld. AR opposed the contention of the ld. counsel and submits that the appellant is admittedly in the business of running of hotels and they are having licence agreement with the other hotels whereas the same activities are taken over by the appellant specifically in the case of 'Piem Hotels & Oriental Hotel Ltd.' where they are paying service tax on the said activity. Therefore, the appellant are required to pay service tax on t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in connection with the management of any organisation in any manner and includes any person who renders any advice, consultancy or technical assistance, relating to conceptualising devising, development, modification, rectification or upgradation of any working system of any organisation. From the said provision, it is clear that the term management is understood to mean running the affairs of an organisation in organised and systematic manner, as opined by the IIM, Ahmedabad. Therefore, the "Management Consultant" will include the services where the service provider is managing the activity of a client. As per the agreement dated 09.09.2002, IHCL shall pay to LHL, consideration comprising of licence fee, semi annually by way of splitting the GOP. Further, IHCL is holding shares to the extent of 18.9% but it comes to sharing of profit they are retaining 30% to 50% of the profit which indicates that the amount retained by them is in lieu of services provided by them. 11. It is further submitted that the contention of the appellant that they were conducting, managing and operating their own business and they have paid rent in the form of licence fee to LHL towards renting of asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... operator was incurring profit or loss. However, in this case, the appellant will share only profit and loss. 14. With regard to the issue of limitation, it is submitted that the fact of the case does not indicate as claimed. It is not a case where the business of LHL has been acquired by IHCL rather it is a case where IHCL was managing the business of LHL and for that they were receiving consideration as percentage of GOP. Therefore, it is a case of wilful mis-statement and suppression. To support this contention, he relied on the decision of Bajaj Auto Ltd. 2010 (260) ELT 17 (SC). 15. Heard both sides. Considered the submissions. 16. In this case the issue before us is whether the appellants are liable to pay service tax under the category of Management Consultancy Service or not, and whether the demand is barred by limitation or not. 17. The larger bench of the Tribunal in Pagaria Auto Center vide Interim Order no. M/35/14/SMB/LB/C-IV dated 12.09.2013 has observed as under:- "20. On a consideration of the apparent conflict of opinion in the decisions mentioned in the order of reference and the other decisions which were cited at bar, it is clear that no uniform pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Term hereof, pay to LHL, on each payment Date the consideration ("Consideration") comprising of - License Fees. "License Fees" payable by ICHL - to LHL under this Agreement shall be payable in instalments and, shall be of such amount which shall be determined in the manner set out below: 1st instalment: Amount payable as License Fees shall be 80% of the GOP of the Hotel for the period from the Appointed Date to 31st of December 2002: 2nd to 10th Instalment: Amount payable as License Fees shall be 70% of the GOP of the Hotel of the Semi Annual Period immediately preceding the Payment Date applicable for such instalment. 11th to 20th instalment: Amount payable as License Fees shall be 60% of the GOP of the Hotel of the Semi Annual Period immediately preceding the Payment Date applicable for such instalment. 21st to 30th instalment: Amount payable as License Fees shall be 50% of the GOP of the Hotel of the Semi Annual Period immediately preceding the Payment Date applicable for such instalment. 31st instalment: Amount payable as License Fees on the date of expiry of the Term of this Agreement shall be 30% of the GOP of the Hotel for the Period from the end of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ll be deposited by IHCL in the Trust & Retention Account to be opened by LHL with ICICI Bank in accordance with the terms of the Trust & Retention Agreement. 4.5 ..... 4.6 LHL shall bear and pay all taxes as applicable to all income that LHL earns pursuant to or under this Agreement. If any tax is to he deducted at source on the payment of Consideration to LHL, IHCL shall do so and furnish appropriate tax deduction certificate(s) to LHL> 5. USE OF ASSETS 5.1 LHL confirms having handed over to IHCL, the Hotel together with the right to use all existing moveables, fixed assets and Facilities for the purpose of the Operation of the Hotel to which IHCL acknowledges. All items including Facilities, Furniture, Furnishings, fixtures, paintings, equipment and all other amenities and support services presently available to the Hotel have also been handed over to IHCL and an inventory of the same shall be prepared and signed by both the Parties within 30 days of the Appointed Date and the same shall be deemed to be a part of this Agreement (collectively referred to and called "the LHL Assets"). IHCL may at its cost have the right to replace any of the LHL Asssets with the prio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ies at a mutually agreed consideration. In the event any of the Stores & Supplies that have been paid for and taken over by IHCL is/are in any manner hypothecated, charged or encumbered by LHL with any bank, financial institutions or any other person, LHL shall undertake to free, release and discharge such Stores & Supplies from such hypothecation, charge or encumbrance. All the Stores & Supplies after the Appointed Date shall at all times, belong to IHCL and be the property of IHCL. Upon expiry or sooner termination of this Agreement, LHL agrees and unconditionally undertakes to take over all Stores & Supplies except those bearing the "Taj logo at the values attributed in the books of accounts of IHCL. IHCL shall be entitled to raise loans/effect borrowings for financing the operations of the Hotel by offering all current assets as security. 6.2 All the book debts in respect of the Hotel pertaining to the period upto the Appointed Date shall be to the account of LHL. Amounts if any, received by IHCL, with respect to such period, subsequent to the Appointed Date, shall be credited by IHCL to the account of LHL. 7. EXISTING MORTGAGE 7.1 After the Appointed Date, except the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... all the assets whether moveable or immoveable created by IHCL as a result of the expansion shall at all times belong to and be owned by IHCL and shall not form part of the security which LHL has created or has agreed to create in favour of the Secured Lenders. LHL further confirms and agrees that subject to Section 10.3 hereunder, IHCL shall be entitled to raise loans/borrowings by offering its assets, either moveable or immoveable created by IHCL in terms of this Agreement as Security. IHCL shall have the right to take away all such assets on the expiry of the Term of this Agreement or on earlier termination of the Agreement provided that before removing such assets, IHCL shall offer to sell the same to LHL for purchase at a fair price to be mutually agreed upon between the Parties or at a value determined by professional valuers which will be final and binding on both the Parties, failing which within 90 days, IHCL shall take away all such assets. However, in respect of the Hotel building and other assets the removal of which will cause irreparable damage to the Hotel building, LHL shall be bound to purchase the same at a fair price to be mutually agreed upon between the Parties....
X X X X Extracts X X X X
X X X X Extracts X X X X
....w IHCL to utilise such proceeds from insurance obtained in respect of LHL Assets towards the replacement of the loss assets or restoring the loss assets to its original form and the balance amount, if any, outstanding after such restoration or replacement of assets is carried by the Parties to their satisfaction, shall be utilised by the Secured Lenders to appropriate the outstanding loan amounts due and payable. It is hereby clarified that in relation to LHL's assets being restored or replaced under the insurance policy obtained in relation to LHL Assets, the owner of such replaced or restored assets would be LHL. In the event IHCL's assets are restored or replaced under the insurance policy obtained in relation to IHCL's assets, the owner of such replace/restored assets would be IHCL. 14.1 During the Term of this Agreement, the Hotel shall be known and designated by such name as form time to time may be selected by IHCL. IHCL may permit the use of any of its Intellectual Property Rights, service marks, trademarks or any other similar property at the Hotel. LHL acknowledges that all trade names and trademarks provided by IHCL to the Hotel, including without limit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as may be required in the opinion of IHLC for a Hotel of this standard and reputation. c) ...... d) It shall pay and discharge all the current liabilities and / or expenses incurred after the Appointed Date save and except as otherwise provided in this Agreement. e) It shall pay and discharge all taxes imposed or payable in law for providing the services during the Term of this Agreement. f) .... g) It shall pay and discharge all the existing fees levied or demanded or payable to the Municipal Authorities or the State Government Authorities or any other authorities concerned as the case may be in respect of the operations of the Hotel if they pertain to the period after the Appointed Date. IHCL further declares and confirms that it shall take all such steps as may be necessary and appropriate to contest such levies, taxes, cess etc., in any court of law/tribunal including filing of appeals, writ petitions, suits and take recourse to such other remedies as it may deem fit and necessary. h) It will promptly pay the consideration in the manner provided in Section 4. ..... .... m) It shall pay sales tax, excise customs, octroi and other duties, dues, levies a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s licence fee or rent and he has also submitted that no prudent business entity shall offer such huge property or running commercial enterprises on rent/lease without seeking any security. In fact by executing the agreements stated hereinabove, the interest of the LHL was secured and on the other hand, a prudent business entity would not continue incurring losses which LHL was doing in the past, therefore, it was a move to sell the hotel and not to continue the hotel being run in losses. Therefore, the contention of the ld. AR is not acceptable. Moreover, in this case the appellant were paying the licence fee as agreed in the agreement on half early basis to settle the amount of liability payable to LHL being the seller of the hotel. 22. We further find that during course of arguments the ld counsel for the appellant produced two licence agreements a) Agreement between Prem Hotels Ltd. and the appellant dated 30.12.2004 and b) Oriental Hotel Ltd. and the appellant dated 28.01.2003 23. In those case, it is the contention of the ld. counsel for the appellant that they are not required to pay service tax as they are themselves managing the hotel. But they are paying servic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....continue to remain the employees of the Party of the First Part. 5. That both Parties have agreed that nothing contained in this agreement shall create employer - employee relationship between Party of the Second Part and any officer or workmen employed in the Factory at Maizapur. 6. That the loan application for sanction of facility for liquidation of cane price is at an advanced stage with a Bank/Financial Institution. Joint efforts will be made for expeditious sanction and liquidation of cane price of last season (Rs. 700 lacs) as quickly as possible. 7. That both the Parties have agreed that joint effort may be made to ensure the allotment of 40 Lac quintals of cane to Factory during the ensuing season from the reserved / assigned area of the Factory for which they have submitted the reservation proposal to the Cane Commissioner (U.P.). 8. That the management committee, as constituted above, will take appropriate steps to complete the repair and required modification work in the Factory for efficient operation of the plant, within time to ensure the start of Factory latest by November 15, 2001 keeping in view the maturity of cane and will also ensure the timely avai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....under the new agreement to be entered separately on mutually agreed terms. 17. In consideration of technical and financial services the Party of the First Part has agreed to compensate the Party of the Second Part minimum charges of Rs. 42.5Lacs per annum every year subject to the ceiling of 20% of the net profit of the sugar division whichever is higher. 18. This agreement will be for the term of five years from the date of execution of this agreement, terminable nevertheless at the option of the either Party by giving to the other three months notice in writing. But the Parties shall be entitled to serve notice only during the month commencing from the 1st April to 31st day of July." In that case, after analysing the terms of agreement, and this Tribunal referring to the definition of "Management Consultant" observed that a consultant is advisory service and not the actual performance of the management function. In this case also, the appellant are performing the activity of Management of hotel and they are not doing any advisory service to LHL, it was further observed that in the said case, that an ocean separate a manager from a management consultant, a performer from ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....red to undertake the following operations: "16. IHCL'S CONVENANTS 16.1 IHCL agrees, undertakes and declares that: a) It shall during the Term of this Agreement pay and discharge all Operating Expenses. b) It shall use, occupy, run, operate, conduct, manage and maintain at its cost the Hotel in accordance with acceptable quality standards and make available to the Hotel professional expertise and Hotel related technology as may be required in the opinion of IHCL for a Hotel of this standard and reputation. c) It shall not commit or do any act or deed whereby the approvals are in any way suspended or adversely affected or liable to be revoked. d) It shall pay and discharge all the current liabilities and/or expenses incurred after the Appointed Date save and except as otherwise provided in this Agreement. e) It shall pay and discharge all taxes imposed or payable in law for providing the services during the Term of this Agreement. f) It shall insure and keep insured the Hotel including the assets belonging to LHL in the manner herein provided at its own cost and expense. g) It shall pay and discharge all the existing fees levied or demanded or payable t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng the terms of this Agreement will be duly obtained from time to time by it. IHCL shall take the assistance of LHL, if so required, for obtaining licenses or permissions in respect of the Hotel. q) It shall ensure that after the expiry of this Agreement, or the sooner termination thereof, the Hotel together with the assets shall be handed over to all-in in a good and serviceable condition, save and except normal wear and tear, subject to LHL settling all dues of IHCL. IHCL further declares and confirms that it shall allow LHL to inspect the Hotel through any of its employees, for the purposes of ensuring that the provisions of this Agreement are being duly complied with by IHCL, after giving an intimation to IHCL /General Manager of the Hotel and such intimation shall not cause any disturbance to and/or disruption of the Operations of the Hotel." 28.1. From a perusal of the activities undertaken by the appellant it can be easily seen that the contention of the appellant that they were conducting/managing their own hotel is clearly disproved. If the appellant, were managing their own hotel, there was no need to enter into an agreement with LHL, who is the owner of the hotel a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s asked to furnish a copy of the agreement entered into with other parties where they were discharging service tax liability under the category of 'Management Consultancy services'. One such agreement entered into with M/s. Piem Hotels Ltd. was furnished by the appellant. The said agreement provided for rendering of consultancy and advisory services by IHCL to the said Piem Hotels Ltd. Article VII of the said agreement is reproduced below: "ARTICLE -VII CONSULTANCY & ADVISORY SERVICES TO BE RENDERED BY THE CONSULTANTS & ADVISORS SECTION - I The consultants and Advisors hereby agree to offer services and advice and guidance in directing and supervising the control and performance of all services and do or cause to be done all things reasonably necessary or proper for the efficient and proper operation of the Hotel. Without limiting the generality of the foregoing, the Consultants and Advisors shall, subject to the approval of the Board of Directors of the Company in overall matters of policy, be vested with authority in respect of the following acts, deeds, matters and things:- (a) recruitment, training and assignment of duties of all personnel, provided that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....asonable repairs, alterations and decorations to the Hotel as the Consultants and Advisors may deem reasonably necessary for the proper maintenance and operation thereof, provided that any expenditure of a capital nature not provided in the approved budgets for any year shall not be incurred without the prior written approval of the Company. (p) The planning, preparation of and contracting for advertising and promotional programme for the Hotel; (q) Advising the Company in matters of public relations; (r) Generally to perform all acts reasonably necessary in connection with the operation of the Hotel in an efficient and proper manner. SECTION 2 If the Company and the Consultants and Advisors agree, the Consultants and Advisors shall use their good offices to arrange such sales and reservation agreements with such reputable international Hotel chains on other international bodies. Fees and other charges payable pursuant to such Agreement shall be paid by the Company and shall form part of deductible expenses. ARTICLE VIII CONSULTATION FEES 1. As fees for the services covered by this Agreement, the Company shall pay to the Consultants and Advisors 5% of the Gr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....clear that IHCL was not undertaking activities on their own account but were rendering the services to LHL by operating/managing the hotel. The agreement also provided for IHCL to report to LHL all the activities carried out by them and to hold discussions to formulate strategies. If IHCL was functioning on their own account, there was no need for submission of reports to LHL or discussion with LHL to devise strategies. Therefore, the terms and conditions of the agreement clearly point out that IHCL was rendering service to LHL and the service consisted of advising, developing and operating strategies for running of the hotel. This activity would clearly fall within the scope of 'management consultancy services' as defined in law. 28.7. It has been argued that M/s. IHCL, the appellant herein, is not receiving any consultancy fees but the consideration is paid for the services rendered by allowing retention of the net sales amount, i.e., sale income minus expenditure and, therefore, since the consideration is paid by way of net sale amount, the transaction is not one of consultancy or advice. This contention of the appellant is clearly mis-placed. The nature or mode of pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le in law. 28.8. Let us now see the statutory definitions provided in respect of 'Management Consultancy Services'. During 16/10/1998 to 30/04/2006, the statutory definition read as follows: "Management Consultant' means any person who is engaged in providing any service, either directly or indirectly, in connection with the management of any organisation in any manner and includes any person who renders any advice, consultancy or technical assistance, in relating to conceptualising, devising, development, modification, rectification or upgradation of any working system of any organisation." 28.9. The definition underwent a change on 1-5-2006 and during 01/05/2006 to 01/06/2007, the revised definition read as follow: "Management Consultant' means any person who is engaged in providing any service, either directly or indirectly, in connection with the management of any organisation in any manner and includes any person who renders any advice, consultancy or technical assistance, in relation to financial management, human resources management, marketing management, production management, logistics management, procurement and management of information techn....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... M/s. Fraser & Ross, AIR 1960 SC 971, the Apex Court observed that when the expression "means" is used, generally the definition is exhaustive. The hon'ble High Court of Gujarat in the case of Parth Wollen Mills Pvt. Ltd. [2012 (25) S.T.R. 4 (Guj)] considered the scope of the expression 'means' and includes' and held that - "In other words, the expression 'includes' followed by 'means' in any definition is generally understood to be expanding the definition of the term to make it exhaustive, but in no manner can the expression 'includes' be utilized to limit the scope of definition provided in the main body of the definition." It can thus be seen that the definition of "management consultancy service" is really very wide and includes in its scope all gamut of activities rendered in connection with such service. 28.12. The scope of 'management consultancy services' was examined by the CBEC in consultation with the Indian Institute of Management, Ahmedabad and the opinion obtained was communicated vide Board's Circular No. 1/1/2001-ST dated 27/06/2001, which reads as follows: 7. In this regard, the Board had consulted t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f advice, consultancy or technical assistance. The scope of the expression 'technical assistance' was considered by this Tribunal in Nokia (India) Pvt. Ltd. vs. Commissioner of Customs [2006 (1) STR 233] and the Tribunal held as follows: "18. The learned counsel for the appellant took aid from the maxim nocitur a sociis for contending that meaning of the expression "technical assistance" occurring in the definition clause of "consulting engineer" should be confined to mere advisory or consultative assistance where purely cerebral function was involved. This would, in our opinion, be totally an unrealistic approach in the field of consultative engineering. Advice and consultation of a saint sitting under a banyan tree may mainly involve thought processes and discourses with no physical activity on the part of the saint towards assisting the recipient in the implementation of advice and, therefore, be purely a cerebral function; but that would be altogether different from the advice and consultancy of a qualified professional consultant engineer who is well versed with a discipline of engineering and has to render professional advice and consultancy to his client in respec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....include managerial services or not? The issue before the apex Court was in the context of an income tax matter. The appellant Oberoi Hotels (India) Ltd. undertook operation of the Soaltee Hotel Pvt. Ltd. in Kathmandu, Nepal and received income in convertible foreign exchange. The income tax department was of the view that the services rendered by the appellant was in the nature of managerial services and the consideration received was in respect of managerial services and, therefore, not eligible for exclusion for the purpose of income tax since the concerned section provided for exclusion of income received towards rendering of technical services and not managerial services. The hon'ble apex Court negatived this contention and held that modern system of management requires considerable technical skill and know-how and, therefore the expression 'technical' should receive a broad interpretation to include professional/managerial services as well. The court observed that as per the New Webster's Dictionary of English language, the word "technical" means what is characteristic of a particular art, science, profession, or trade and the word "technology" means the branch....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ract or a composite contract comprising various activities of different nature of services do not make any difference to discern role of each service involved in a composite or Turnkey contracts." If we apply the above concept of service, in my considered view, the executor functions undertaken by the appellant in the present case would certainly fall within the scope of management consultancy service. 28.17. The hon'ble Apex Court in the case of Balwant Singh vs. Jagdish Singh [2010 (262) E.L.T. 50 (S.C.)] explained the principle of statutory interpretation as follows:- "It must be kept in mind that whenever a law is enacted by the legislature, it is intended to be enforced in its proper perspective. It is an equally settled principle of law that the provisions of a statute, including every word, have to be given full effect, keeping the legislative intent in mind, in order to ensure that the projected object is achieved. In other words, no provisions can be treated to have been enacted purposelessly. Furthermore, it is also a well settled canon of interpretative jurisprudence that the Court should not given such an interpretation to provisions which would render the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....'. The Basti Sugar Mills Co. Ltd.'s case (supra) relied upon by the appellant and the Member (Judicial) does not even consider the scope of the term 'technical assistance' specified in the 'Management Consultancy Service. Therefore, the said decision is distinguishable both on facts and in law. The opinion of the Indian Institute of Management was also not there before the Tribunal for consideration in the said case. In any case, it is a settled position in law that the principle of res judicata will not apply in matters of classification in a tax dispute. 28.19. In the appeal before us, a series of activities have been undertaken by the appellant by way of financial management, human resources management, marketing management, inventory management and so on. Therefore, the scope of the work involved in the present case is substantially wider than that in the Basti Sugar Mills Co. Ltd.'s case. Therefore, the ratio of the said decision has no relevance, whatsoever, to the facts of the present case. 28.20. The next question for consideration is whether the extended period of time could be invoked to confirm the service tax demand. While the department ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cise vs. Mehta & Co [2011 (264) ELT 481 (SC)] has held that only when the department is informed in writing and the details are furnished, it can be said that the department acquired knowledge and the time-limit will start from the date of receipt of information. From the date five year's period is available to the department to issue the demand notice. The same view was reiterated by the hon'ble Gujarat High Court in the case of Neminath Fabrics Pvt. Ltd. [2020 (256) ELT 369 (Guj)] by observing that if the appellant assessee withheld the information from the department by not declaring the same in the statutory returns, then a presumption might rise against the assessee justifying invocation of extended period of time for raising the demand. Following the same, in the present case also, it has to be held that the appellant has suppressed the information with intent to evade tax and therefore, invocation of extended period of time for confirmation of demand is justified. 28.22 The last question is with regard to imposition of penalties. As regards the imposition of penalty in the present case, penalty has been imposed under the provisions of Sections 76, 77 and 78 of the....