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TMI Blog2011 (7) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... national and international standard and guides. National Accreditation Board for Certification Bodies, National Registration Board for Personnel and Training (NRBPT) & National Accreditation Board for Hospitals and Healthcare Providers (NABH) are the three organizations of QCI which are mainly regulatory bodies giving accreditation to bodies seeking accreditation after confirming that the criteria of accreditation during assessment have been closed to the satisfaction of the board, there are no adverse reports/information/complaints with the board about the applicant regarding the quality and effectiveness of implementation of certification system and the certified clients of the applicant body are satisfied by the conduct of the applicant body and its certification system. National Board for Quality Promotion (NBQP) is mainly instrumental for promoting awareness. It was felt by the department that the services are covered under Technical Inspection & certification services and are being provided to commercial & other organizations on commercial terms without charging & paying service tax on the services rendered under section 65(105)(zzi) of the Finance Act, 1994. 3. Investigati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice Tax of Rs. 1,23,60,823 along with interest leviable under section 75 of the Act. Penalty of Rs. l,23,60,823 and Rs. 1,000 was imposed under sections 78 & 77 of the Act. Impugned order is before us in the appeal. 7. Learned Counsel for the appellant Mr. P.K. Sahu submitted that order passed by the Commissioner is not proper and legal and is not sustainable. He made the following submissions:- (i) The appellant's activity of accrediting bodies about competence of laboratories by assessing its management systems for quality, administrative and technical operations is not classifiable under the taxable category of "technical inspection and certification" service. The Hon'ble CESTAT in American Quality Assessors (India) (P.) Ltd. v. Asstt. Commissioner Service Tax [2009] 22 STT 411 (Bang. - CESTAT) has held that principle of interpretation Noscitur A Sociis would apply to interpret the definition of the expression "technical inspection and certification" as given in section 65(108) of the Finance Act, 1994, and it would include technical inspection and certification of inanimate objects and would not apply to certification of management of human organisations. &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not envisage that one authority would initiate the proceedings and other would pass the adjudication order. 8. Learned DR appearing for Revenue defended the finding of Commissioner and stated that activity of accrediting bodies is squarely covered under technical Inspection and certification services and these services are liable to service tax. He further contended that extended period is applicable in this case as appellant have wilfully suppressed the facts to evade tax. 9. We have gone through the records and heard both sides. We find that 'technical inspection and certification service' is defined under section 65(108) of the Acts as under:- "Technical inspection and certification" means inspection or examination of goods or process or material or any immovable property to certify that such goods or process or material or any immovable property qualifies or maintains the specified standards including functionality, quality, utility or safety or any other characteristic or parameter, but does not include any service in relation to inspection and certification of pollution levels. Further as per section 65(105)(zzi) of the said Act taxable service is defined as "any ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on on documentation received from the customers and conducted an audit/assessment of the quality system at customer's place with reference to the ISO standard. After successful completion of the assessment process, such assessment was sent to AQA-USA, which issued ISO-9000/QS-9000/ISO-14000 certificates. In other words, the appellant did not issue any certificate themselves. AQA-USA, thereafter, reviewed the audit conducted and sent by the appellant for its conformation to the international standards and put up the case to its registration committee for approval. On approval from the registration committee, AQA-USA issued the certificate to the customers directly with validity for three years. For doing the audit work as per instructions of AQA-USA, the appellant charged certain fee as audit fee from the prospective customer. 13. In this case, American Quality Assessors (India) (P.) Ltd. (supra) were charging audit fees from the customers whereas certification was done by American Quality Assessors, USA directly on the basis of audit/review report of American Quality Assessors (I). American Quality Assessors (I) does not issue any certificate whereas in the case before us, certifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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