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2011 (3) TMI 826 - AT - Service TaxScope of the Consulting Engineering Service - invoices as "Drawing", "Designing", "Engineering" or "Training" - held that:- The preparation of basic engineering drawings & detailed engineering drawings, on the basis of which erection and installation work is done and training of the clients' personnel in operation & maintenance of the equipments installed is clearly technical assistance provided to the clients and hence the same is covered by the definition of Consulting Engineer's services. Indivisible lumpsum Turnkey Contracts for Designing of erection, installation & commissioning of Instruments and Control Systems - Held that:- the contracts in this case have a distinct component of activity, coming within the purview of "consulting Engineer's service" and service tax under Section 66 read with Section 65 (105) (g) of the Finance Act, 1994 would be chargeable or the amount charged for "drawings/designs, Engineering", training, etc. It has been pleaded by the Appellant that the charges for drawings, designing, engineering, training etc. as mentioned in the contract, are only milestone payments, not the actual charges for their activities. This contention is unacceptable, as when from the contracts and the invoices raised by the Appellant, it is clear that they have charged their clients for drawings/designing, Engineering, and technical training. Extended period of limitation - held that:- Just because in 1991 a show cause notice had been issued to the Appellant for including "Engineering charges" and "erection, installation and commissioning charges" in the assessable value of the instruments and equipments being cleared by them to their clients and demand of differential excise duty on this basis, it could not be presumed by the Departmental officers that during subsequent period also they, in addition to sale of the instruments and control equipment manufactured by them, are also engaged in systems design activity. We are, therefore, of the view that the Appellant are guilty of suppressing the relevant information from the Department and, therefore, longer limitation period of five years for recovery of non-paid service tax has been rightly invoked by the Department. Penalty - held that:- Though Section 80 of the Act provides that notwithstanding anything contained in the provisions of Section 76, 77 and 78, no penalty shall be imposable on this assessee for any failure referred to in the said provisions if the assessee proves that there was reasonable cause of the said failure, no valid reason has been given by the appellant for their failure to obtain service tax registration during the period of dispute or at least inform the Department about their activity. - Penalty u/s 78 sustained.
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