TaxTMI 
TaxTMI 
TaxTMI 
2017 (5) TMI 653
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....ice is consulting engineer may include any one or more of the following activities. (i) Feasibility study; (ii) Pre-design services/project report; (iii) Basic design engineering; (iv) Detailed design engineering; (v) Procurement; (vi) Construction supervision and project management; (vii) Supervision of Commissioning and initial operation; (viii) Manpower planning and training; (ix) Post-operation and management; (x) Trouble shooting and technical services, including establishing systems and procedure for an existing plant. He argued that in terms of Sr. No.2(i) and 2(iv) of this list, the respondent activity is provision of "Consulting Engineer Service". It has been argued in the grounds of appeal that the Commissioner (Appeals) has fail to consider the admission made by Shri T. S. Selvan, Excise Officer of the assessee to the fact that they have provided services like Basic Design Engineering and Detailed Design Engineering to IOCL, Barauni. It has further argued that Commissioner (Appeals) has wrongly relied upon the decision of this Tribunal in the case of M/s. Daelim Industries Company Ltd. It has been argued that the contract in the case of M/s. Daelim I....
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.... TANK) shall design all civil, structural, architectural work and prepare all required civil,, architectural and structural DRAWINGS needed for construction. "Design Engineering to comply with Design Engineering Specification" given above. 10.02 Contractors (DAELIM) shall prepare basic & detailed engineering drawings & other supporting documents as required for completion. 1.05.04.02 All design engineering and preparation of Drawings shall be carried out by the Contractor (VIJAY TANK) 10.3 Drawing supplied by contractor (DAELIM) shall be reviewed by EIL (Consultant) / Owner (IOCL) 1.05.04.03 & 1.05.04.04 All drawings shall be of standard size, prepared in ink; the Contractor (VIJAY TANK) shall submit requisite number of prints of supporting design calculations along with explanatory notes, computer inputs & outputs and Drawings (complete in all respects) for review and checking purposes 10.4 EIL(Consultant)/Owner (OCL) may review and offer comments, suggestions on layout, structural scheme, design and or drawings prepared by Contractor (DAELIM) 1.05.04.06 to 1.05.04.09 Consultant (PDIL) may review and offer comments, suggestions on layout, str....
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....o argued that the demand has been calculated on the basis of the sales income taken straight away from the Balance Sheet. The said income includes all kinds of receipts and not merely the receipts of the works contracts of the kind being examined for the liability. 3.5 Learned counsel also argued that extended period of limitation cannot be invoked as the appellants had a bonafide belief that they are not liable to the service tax as is evident from the statement of their Director Sh V Sundarrajan. 4 We have gone through rival submissions. We find that the impugned order has short listed the issues to be decided as follows:- (i) Whether service tax is chargeable in the category of Consulting Engineers Service on the activity of providing Design, Drawing and Documents etc under the contact for supply and erection of 6 Moulded LPG Storage Systems-Bullets to M/s IOCL, Barauni; (ii) Whether service tax is chargeable in the category of Consulting Engineers Service on similar activities undertaken by the appellants in respect of other clients under the Purchase Orders/Contracts during the period 1997-1998 to 2001-2002. (iii) Whether the demand for the period 1997-1998 to 2001-200....
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....nsulting engineer. If the service rendered by the assessee cannot be considered as a consulting engineer, the question of calling upon the assessee to pay the service tax under the Finance Act, brought the assessee under the word consulting engineer does not arise at all. Therefore, the said point has to be answered against the revenue and in favour of the assessee." In the instant case the demand pertains to the period prior to 2006 and the appellants are a company. In these circumstances the appellants do not come under the definition of consulting engineer in terms of Section 65(31) of the Finance Act 1994. Thus the demand under the head of 'Consulting Engineer' cannot be sustained against a company. The proceeding cannot therefore be sustained against the appellant and demand of tax, interest and penalties has to be set aside. 4.2 Now we examine the other issues. We find that the Ld. Commissioner (Appeals) has compared the terms of the contract of the appellant in case of supplies made to M/s IOCL with the terms of contract examined by tribunal in the case of M/s Daelim Industrial Company. The Commissioner (A) has incorporated a comparison chart of the terms of the tw....
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....tailed scrutiny the Commissioner found the facts in the two cases to be identical. The Commissioner further observed that the Revenue has not challenged the contention of the VTTL that the activities in respect of which demand has been raised for the period 1997-1998-to 2001-2002 were similar to the activities in the case of IOCL, Barauni contract, in respect of which the purchase order was available. She also examined certain contracts produced by the VTTL during the proceedings before the Commissioner (Appeals), namely, those of M/s ELF Gas India Limited, M/s IOCL, Chennai. The impugned order clearly observes that - 15.1 On examining the matter, it is seen that there is no denial/ challenge from the side of the Department/Adjudication Authority about the contention of the Appellants that the activities in relation to which the demand for the period 1997-98 to 2001-02 was raised/confirmed were similar to the activity as in the IOCL Barauni case. This is also borne out from a perusal of some of the Contracts/purchase Orders, copies of which were produced by the Appellants during the proceedings, eg. Purchase Order No. A082/TEC/2001 Dated 18/04/2001 from M/s Elf Gas India Limited ....
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....of IOCL. Therefore relying on the said decision of tribunal in the case of M/s Daelim Industrial Company, holding the same to be given in identical facts, dropped the demand under the category of consulting engineering service. While dropping the demand the impugned order also holds as follows 14.3 Thus, on perusal of the Clauses in the contracts in the two cases, it is seen that both projects are essentially turn key projects for supply and erection/ commissioning of plant/ storage tanks and not consultancy contracts The Design, Drawing and Detailed Engineering carried out by the respective parties are for execution of the said contract and are thus incidental/integral to their carrying out the project. In the case of M/s Daelim Industrial Company Tribunal had granted relief to the appellant. The decision in the case of M/s Daelim Industrial Company was also approved by Hon'ble Apex Court. 4.3 As against these findings in the impugned order the review has been ordered on the CBEC Circular NO.B.43/5/97-TRU dated 02-07-1997 in which while clarifying the scope of services falling under the category of 'Consulting Engineer', it is stated that the scope of the se....