TMI Blog2009 (6) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... ong with interest under Section 75 of the Act and besides, proposing penalty under Section 78 of the Act; that on adjudication, vide OIO No. RTN/STC/SCN/MSG/240/04-05, dated 6-11-2006, demand raised in the SCN-cum-Demand Notice was confirmed along with interest in addition to imposing penalty of ₹ 1,000/- under Section 77 of the Act; that being aggrieved by the above order, the appellant filed an appeal before the Commissioner (Appeals), who vide his OIA No. PII/BKS/54/2007, dated 12-4-2007 rejected the appeal as time-barred and that being aggrieved by the said appellate order, the appellant approached the CESTAT who vide its order No. A/410/WZB/CSTB/2007/C-I, dated 25-7-2007 [2007 (8) S.T.R. 364 (Tri.-Mumbai)] set aside the said OIA and remanded back for fresh decision on merits to the original adjudicating authority; that basing on the above directions, the present impugned order was passed wherein the lower authority has held that the activities of the appellant are falling within the meaning of Consulting Engineer Services and accordingly, the appellant is liable to pay service tax during the material period; that he has further held that the appellant provided services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeared before me at 11.00 AM. None appeared from department s side despite intimation. During the hearing, in addition to reiterating the submissions made in the appeal memorandum, they further submitted that their client did not render any consulting service to M/s. Finolex Industries Ltd. from where he retired. In other words, he continued to do the same work which he was doing when he was working in the company. The scope of the work entrusted to their client vide M/s. Finolex Industries Ltd. letter No. FIL/JSA/1156, dated July 4, 2002 did not involve any Consulting Engineer s service and such scope of work mentioned therein can be done by any person who need not have engineering qualification and hence they contended that their client is not liable to pay any service tax as consulting engineer during the material period. 3.1 With regard to penalty, they referred to the SCN wherein the SCN invoked only Section 78 of the Finance Act, 1994 for imposing penalty. Whereas the impugned OIO has invoked Section 76, which is not permissible, as the lower adjudicating authority has travelled beyond the scope of the SCN. 4. I have gone through the case records including reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The terms and conditions of your appointments are as follows: A) Scope of Work : You will be responsible for : 1) Maintenance of HT LT systems 2) New installation of HT LT equipments. 3) Liaison with MSEB authorities. 4) Monitoring of meter reading of 33 KV and 220 KV. 5) Monitoring electrical energy/conservation. 6) Taking care of electrical installations at both colonies and Thorli Nala pumping station. 7) Controlling the activities of Electrical department. 8) Managing manpower utilisation. 9) Interacting with Telecom department for smooth functioning of telephone lines, and complaint solving. B) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (M S Gokhale)_______ 4.3 From the above letter, it may be seen that M/s. Finolex Industries Ltd. has not engaged the services of the appellant, inasmuch as the subject therein reads as appointment as an executive (electrical) . Besides, the opening para reads as We are pleased to appoint you as Executive (Electrical) . The second line reads as The tenure of your contractual services as Executive (Electrical) will be of 12 months .......... In the realm of services, the question of appointment of service provider does not arise. 4.4 Secondly, it may also be seen that under scope of work, the appellant was asked to take the responsibility of those items mentioned therein from Sl. No. 1 to 9. A cursory reading of the above scope of works would reveal that the appellant was entrusted the work of liaison with MSEB authorities, maintenance of HT and LT equipments, controlling activities of electrical department, managing of manpower utilization etc. In other words, the appellant has neither given any advice nor consultancy services or any technical assistan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scope of work entrusted to the appellant of M/s. Finolex Industries Ltd. letter dated 24-7-2002 cited supra. Therefore, the activities of the appellant cannot be brought under the Consulting Engineer Service and hence the appellant is not liable for any service tax. 5. Further as pointed out by the appellant/Advocate that the order suffers from so many infirmities. The SCN invokes penalty provisions of Section 78. Whereas the OIO dated 6-11-2006 imposed penalty of ₹ 1,000/- under Section 77 and again the present impugned OIO, against which the present appeal is filed, introduces a new section viz. 76 and imposes equal penalty in addition to imposing penalty of ₹ 2,000/- under Section 77 which all clearly show that the Assistant Commissioner has travelled beyond the scope of the SCN without understanding the principle involved in the adjudication. On this count, penalty imposed in the impugned OIO is not sustainable. However, the question of penalty does not arise since the appellant has succeeded on merit. 6. In view of the above facts and circumstances, I allow the appeal by setting aside the impugned OIO passed by the Assistant Commissioner, Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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