TMI Blog2007 (4) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... r the management of the sugar mill of the latter at Maizapur. Central Excise Authorities treated the above agreement as a Management Consultancy agreement and demanded the service tax. The present appeal challenges that demand as well as the penalty imposed for failure to pay the said tax. 2. The contention of the appellant is that the agreement was not a Consultancy Agreement but a Management Agreement and the revenue authorities are in error in treating the agreement as a Consultancy Agreement. It is also being pointed out that this Tribunal dealt with a similar case in its decision in the case of Rolls Royce Industries Power (I) Ltd. v. CCE, Vishakhapatnam as reported in 2006 (3) S.T.R. 292 (Tri.) = 2004 (171) E.L.T. 189 (Tri. - Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Party of the Second Party will identify, recruit and appoint capable and efficient, technical, administrative and financial staff, wherever required, in consultation with the Party of the First Part. 3. The staff recruited and appointed as referred in para 2 of this agreement shall be on the pay rolls of the Factory and shall be paid remuneration as employees of the Party of the First Part. 4. That the workmen and staff already employed in the Factory and the new staff appointed by the Party of the Second Part will continue to remain the employees of the Party of the First Part. 5. That both Parties have agreed that nothing contained in this agreement shall create employer - employee relationship between Party of the Second P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Second Part has agreed to identify all the administrative and technical bottlenecks in the Factory and shall remedy them before the start of the crushing season. 12. That it has been agreed that for the smooth running of the Factory, proper and timely arrangements of finance is the essence. To provide leverage in liquidity, the Party of the First Part has agreed to allow the operation of an account with a designated bank to one nominee of the Party of the Second Part as joint signatory with the Party of the First Part. The modus operandi will be decided mutually. 13. The party of the Second Part has agreed to use funds provided by the Party of the First Part and generated in the Factory or loan raised for the Factory shall exclusive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This agreement will be for the term of five years from the date of execution of this agreement, terminable nevertheless at the option of the either Party by giving to the other three months notice in writing. But the Parties shall be entitled to serve notice only during the month commencing from the 1st April to 31st day of July. 5. The perusal of the above clauses make it clear that under the agreement with Indo Gulf Industries Ltd. the appellant has been entrusted the operation of the factory (Clause '1'). The remaining clauses of the agreement are to enable the appellant to perform the operation of the factory smoothly and well. The agreement is not for any advice or consultancy. 6. The definition of management consu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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