2018 (8) TMI 955 - AT - Service Tax

Consulting Engineers Service - Body Corporate - Held that - The word body corporate being included after amendment in Section 65/31 w.e.f. 01.05.2006 there can be no question of levy of Service Tax for Consulting Engineering Services of body corporates before 01.05.2006 - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of the term "Consulting Engineer" under Section 65(31) of the Finance Act, 1994 before and after the amendment on 01.05.2006.

Analysis:
The appellants, registered under the Companies Act, 1956, were involved in setting up electrical switchyards. The Department demanded Service Tax for consulting engineering services rendered from 10.09.2004 to 30.04.2006. The appellants argued that consulting engineering services by corporate bodies only came into existence from 01.05.2006 as per statutory provisions.

The appellants relied on legal precedents like CST Bangalore Vs. Turbotech Precision Engineering Pvt. Ltd. and Commissioner of C.Ex. & Cus., Kerala Vs. Larsen & Toubro Ltd. to support their contention that corporate bodies were not covered under consulting engineering services before 01.05.2006. Additionally, they cited various other case laws to strengthen their argument.

The Authorized Representative reiterated the findings of the Original Adjudicating Authority (OIO) and the Order-in-Original (OIA) during the proceedings.

After hearing both sides and examining the case records, the Tribunal observed that the issue was conclusively settled by the Hon'ble Karnataka High Court and other Tribunal Benches. The inclusion of the term "body corporate" in Section 65(31) post-amendment from 01.05.2006 precluded the imposition of Service Tax on consulting engineering services provided by body corporates before the said amendment date. Consequently, the appeal was allowed in favor of the appellants, granting any consequential relief deemed necessary.

The operative part of the Order was pronounced in Open Court on 18/07/2018.