TaxTMI 
TaxTMI 
2009 (1) TMI 44
X X X X Extracts X X X X
X X X X Extracts X X X X
....o given finding that the appellants are 'Management Consultant', but in his final order, he has upheld the order of the Assistant Commissioner. Thus, the order of the Commissioner (Appeals) is contradictory to his findings and the real controversy which was before him in the appeal filed by the appellants was not examined in terms of the agreement. We, therefore, set aside the order of the Commissioner (Appeals) and remand the case to him for a fresh decision after taking into consideration the grounds taken by the appellants and the agreement entered into by them with M/s Gillete and other relevant records and decisions of the higher forum for coming to the correct conclusion in accordance with law. Opportunity of hearing also be afforded to the appellants before deciding the appeal in accordance with law." 3. The relevant facts of the case, in brief, are that the appellants were engaged in the manufacture of 'Batteries' in their factory. They sold one of its units 'Zinc Chloride batteries' having manufacturing facilities located at Mysore to M/s Gillete Diversified Operation Limited (in short, 'M/s Gillete'). Thereafter, M/s Gillete reques....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ice to M/s Gillette. He also submits that "Management Consultant" means any person who is engaged for providing any service in connection with the management in organization in any manner. He emphasised that the words "management in any manner" include technical service. In the present case, the appellant company provided the services to Gillete in technical advisory services, which includes within the definition of the Management Consultant. He relied upon the Board's Circular No.1/1/2001-ST (Section 37-B), dated 27.6.2001 F.No.177/ 2/2001-CX.4. He also relied upon the decision of the Tribunal in the case of Parasmal Bam vs. C.C.E., Indore - 2006 (3) STR 73 (Tri-Del.). 6. After hearing both sides and on perusal of records, we reproduce the relevant portion of the agreement, for the purpose of proper appreciation of the case, as under:- "WHEREAS (a) SISL is, inter alia, engaged directly in the business of manufacture, sale and supply, inter alia, of batteries for the domestic and export market. (b) SISL has valuable knowledge, expertise and experience in the field of manufacture of batteries. (f) GDOL have acquired a Zinc Battery manufactu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to manufacture the products in India subject to the terms and during the terms of this agreement on a continuous basis. The term of this agreement shall be one years from 1.1.2001 i.e. upto 31.12.2001. xxx xxx xxx 3. TRAINING 3.2 During the term of this agreement and GDOL, may discuss the need for training its personnel in the manufacturing facilities of SISL. All training shall be for such periods and on such terms as may be mutually agreed upon in writing between GDOL and SISL. 4. CONSIDERATION 4.4 In consideration of SISL providing Technical Advisor Services to GDOL, GDOL shall pay SISL Technical Advisory Services fees, subject to taxes applicable of Rs.6,00,00,00/-(rupees six crores only) each on or before the 30th June 2001 and 31st December 2001 r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce Act, 1994.The definition of 'Management Consultant' (as it is stood during relevant period) is reproduced below:- "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 relating to conceptualizing, devising, development, modification, rectification or upgradation of any working system of any organisation." 9. On perusal of the definition of "Management Consultant", it appears that the following activities would be liable to levy tax:- (a) Any service, either directly or indirectly, in connection with the management of any organization in any manner; and (b) It includes any advice, consultancy or technical assistance, relating to conceptualising, devising, development, modification, rectification or upgradation of any working system of any organization. 10. The word 'management' as per New International Webstor's Comprehensive Dictionary of English language means, 'art or act of managing the manner of directing or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....organising, staffing, directing, controlling and coordinating. Management also invariably involves designing organisational structure around functions such as marketing, manufacturing, research and development and finance and/or business area such as product groups or geographical markets. Thus management of any organisation involves carrying out a wide variety of clearly defined activities across a number of organisational sub-units in a coherent and coordinated manner. Since the expression Management is an inclusive term, management consultant would also be equally encompassing expression and would include any adviser who renders services on any aspect of management. They have further opined that financial advisory services rendered in merger and acquisition transactions are clearly in the nature of services in connection with the management of an organisation as merger and acquisition themselves are important dimension of modern management. 8. After considering the ILO publication on management consulting, various other literature on the subject, management practices and profiles of practicing management consultants they have concluded the following: (i) the term management i....