2006 (2) TMI 707

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....y in California, USA. They had entered into a Contract/Letter of Intent dated 11-7-1997 for design, detailed engineering and preparation of drawings/specifications for Hot Water Generation System of M/s. JPOCL's Air Separation Plant, Development of Process and designing of Complete Engineering System, including layout, General Agreement of equipment, piping and instrumentation diagram, preparation of specifications equipment and piping plus instrumentation, bill of material including specification, piping schematics process description, start-up, testing and commissioning procedures to be installed at M/s. JPOCL. They had not registered themselves under the Service Tax, hence after due investigation, proceedings were initiated for recovery ....

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..... It is contended that they are manufacturers of industrial burners, gas, oil, coal and waste fuel firing equipments for boilers, air heaters and burners for refinery furnaces, rotary kilns and reverberatory furnaces. The predominant activity carried out by them is manufacture of various parts. Hence, they cannot be treated as engineering firm rendering consultancy, advice or technical assistance in any manner to a client in the discipline of engineering. Hence, they are not covered under the term "Consulting Engineer", as defined in the Finance Act, 1994. They rely on the judgment rendered by the Tribunal in the case of Navinon Ltd. v. CCE 2004 (172) ELT 400/[1994-2006] STT 601 (Mum. - Cestat) wherein it has been held that royalty paid und....

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....2005, dated 14-11-2005]. 5. The learned SDR reiterated the Departmental contentions. 6. On a careful consideration and perusal of the entire records, it is clear that the appellants have only supplied the technology pertaining to design, engineering and technical specifications of Hot Water Generation System. There is no direct service pertaining to consulting engineering services provided by them in terms of the definition appearing in the Finance Act under this category. The Tribunal in the case of Navinon Ltd. (supra) has clearly held in paras 2 and 3 in a similar circumstance that recipient of technical know-how from foreign company against payment of royalty, not being authorized representative of that company in India, could not....

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....n or on his behalf by any other person authorized by him. In the present case, from the agreement of transfer of technology and know-how, it is apparent and if its services covered then the appellants herein are the recipient of such services, which are provided by M/s. Ciba Geigy Ltd., Switzerland or their authorized representatives in India. They were required to discharge that obligation and liability. The appellants cannot be fastened with the said tax liability since they are being authorized representative of M/s. Ciba Geigy Ltd., Switzerland, is not forthcoming from the records. Therefore, the Commissioner (Appeals) upholding the order dated 27-8-2003 asking the appellants to discharge the tax liability and imposing penalty on them n....