TMI Blog2007 (11) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... of practicing Chartered Accountant. The findings recorded in paras 1 to 13 are reproduced herein below " I have gone through the record of this case and carefully considered various submissions of the appellant. 1. The adjudicating authority has confirmed demand of Service Tax and other consequential liabilities on services provided to M/s MESCOM for various items of work namely, opening ledger accounts, preparation of monthly bills, preparation of skeleton bills, accounting of demands and recoveries, maintenance of daily abstracts and tallying, preparation and issue of disconnection lists to field staff and preparation of union M/s and consolidated DCR statements. The confirmation has been done on the ground that these are taxable services of accounting provided by a practicing chartered accountant in his professional capacity and Notification No. 59/98 S.T. dated 16-10-1998 includes such a service of accounting for attracting levy of Service Tax on professional services of a practicing chartered accountant. 2. The appellant on the other hand contended that services provided to M/s MESCOM were not provided by him in his professional capacity as a practicing chartered acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions relating to termination of contract at one month's notice and termination following computerization of ledgers, the fact that both chartered accountants and non chartered accountants were paid similar service charges etc. goes to establish that contract is for outsourcing the work of ledger maintenance and billing and not for hiring a chartered accountant for his specialized professional skills of accounting which involved application of principles and procedures of accounting which cannot be dispensed with on account of computerization of ledgers and which cannot be attended by persons other than a chartered accountant. 6. I therefore come to a conclusion that notwithstanding the fact that contract was offered to appellant on account of his being a empanelled chartered accountant, the nature and scope of work given and conditions of work envisaged makes it clear that the services were neither offered nor provided as a professional service of accounting attracting Service Tax liability in terms of Notification No. 59/1998 S.T. by attracting classification under category of services provided by a practicing chartered accountant. 7. Even if it is accepted that the service wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pretation of results thereof and communicating the result of this interpretation to the end user for decision making. The appellant could have been held liable to tax for having rendered accounting service only if he had maintained ledgers and carried out all the process referred above for ultimately drawing a balance sheet for M/s MESCOM. Ledger maintenance per se is not a taxable service of accounting done by chartered accountant in his professional capacity. 11 . It is therefore clear from the scope of contract that the appellant actually provided services of ledger maintenance, by way of deputing manpower, as per plans and specification already determined for transactions limited to the area of billing, recoveries, etc. and generated relevant MIS and DCB statement. These statements and reports do not amount to a balance sheet for M/s MESCOM. I therefore come to a conclusion that services provided by the appellant to M/s MESCOM do not amount to a professional service of accounting provided by a practicing chartered account and accordingly did not attract Service Tax liability in terms of Notification No. 59/1998 S.T.I also hold that ledger maintenance is only an ingredient an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and they have to be treated as carrying on that activity and hence, they were liable for confirmation of Service Tax in terms of the Show Cause Notice issued to them. 4. The learned SDR took us through the Grounds of Appeal and urged that the activity carried out by the respondent was in the nature of Chartered Accountant's and the accounting and billing related services is nothing but recording, classifying and summarizing all transactions in monetary terms. It is submitted that the respondent is accounting and maintaining revenue accounts of the company (M/s. MESCOM), which is within the scope of taxable service provided by the practising Chartered Accountant, in terms of Sl. No. (i) Accounting and Auditing of Notification No. 59/98-S.T. dated 16-10-1998. Therefore, the Commissioner (Appeals)'s order is not correct. Several grounds raised in the memo of appeal were read through and the learned SDR distinguishes the order given in respect of the same issue by this bench in the case of M/s. Jaded Siddappa Co v. CCE and vice versa by Final Order Nos. 1146 to 1148/2007 dated 26-9-2007 [2008 (9) S.T.R. 239 (T)]. The learned SDR submits that the work details in the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and maintenance of ledgers. (ii) offers to perform or performs services involving the auditing or verification of financial transactions, books, accounts, or records or the preparation, verification or certification of financial accounting and related statements or holds himself out to the public as an account; or Comment : This also does not cover the raising, if it were the verification of bills raised by others then it would be applicable. (iii) renders professional services or assistance in or about matters of principle or detail relating to accounting procedure or the recording, presentation or certification of financial facts or data; or Comment : This is also about advise or guidance for recording or accounting and not the recording itself. (iv) renders such other services as, in the opinion of the Council, are or may be rendered by the Chartered Accountant in practice; and the words "to be in practice" with their grammatical variations and cognate expressions shall be construed accordingly. Pursuant to clause (iv) above the Council has resolved that in its opinion the services that may be rendered by a Chartered Accountant in practice includes (a) the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofessional services relating to EDP Comment: The services of raising bills or maintaining the ledgers cannot be said to be that of management consultancy. Therefore the practicing chartered accountant can do only the above said activities under his professional capacity. 6.1 On the above reading of the extract from the Chartered Accountants Act, it is clear that the activity of outsourcing of meter reading, billing and ledger posting which was an activity to be done by the respective companies does not come within the ambit of the professional activity of Chartered Accountant. It is also seen from the records that the said three companies had outsourced the work to other private parties also who were not Chartered Accountants. Moreover, the fact of the matter is that the employees were not getting trained as Chartered Accountant under the Chartered Accountants Act. They were unskilled personnel without qualifications and were only doing manual work. The employees were covered under the various labour legislations such as Contract Labour (Regulation and Abolition Act, 1970) and Minimum Wages Act. Therefore, the order given by the Commissioner (A) in the service providers cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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