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Judgment
The appellant is in appeal against the impugned order wherein service tax demand along with interest has been confirmed against the appellant and
penalty under various provisions of Finance Act, 1994 was also imposed.
The facts of the case are that during the course of audit of the balance sheets of M/s. Poddar Alloys Pvt. Ltd., it revealed that during the period
1999-2000 a sum of Rs.72,12,008/- were received by them as the commission on the ground of supervision of fabrication and erection of supporting
structures and equipment from the client namely M/s. Malvika Steels Ltd. and M/s. Usha Ispat Ltd. The revenue is of the view that as the appellant
has received a commission on account of supervision of fabrication and erection of supporting structure and equipments the same is covered under the
category of Management Consultancy Services as appellant is providing technical assistance to their clients. Therefore, a show cause notice dated
22.04.2005 was issued by invoking extended period of limitation. Matter was adjudicated. Demands proposed in the show cause notice were
confirmed and penalties were also imposed. On appeal before the Ld. Commssioner (A), the adjudication order was affirmed. Aggrieved from the
said order, the appellant is before us.
Shri Kamaljeet Singh Ld. Counsel for the appellant submits that the appellant is having a good case on limitation as show cause notice has been
issued by invoking extended period of limitation whereas in the show cause notice no allegation of suppression, fraud, collusion, willful misstatement
and suppression of fact has been alleged against the appellant.
On merits he submits that the appellant was assigned only on work of supervision and appellant was not providing any given kind of assistant or
advice to their client. Therefore, activity of supervision does not fall under the category of management consultancy services. Therefore, the impugned
order is required to be set aside.
On the other hand Shri Govind Dixit, Ld. AR appeared on behalf of the Revenue and submits that as the appellant is required to get itself registered
with the service tax department and they failed to do so. Therefore, the extended period of limitation has been rightly invoked in this matter. On merits,
he submits that the activity of supervision of supporting structure and equipments is a specialized supervision. Therefore, the same amounts to
technical assistance provided by the appellant. Therefore, it is covered under Management Consultancy Services. In these circumstances, the
impugned order is required to be affirmed and appeal be dismissed. He further submits that the department came to know of the commission received
by the appellant only through the Balance Sheet for the year 1999-2000 and appellant has not obtained registration, therefore, extended period of
limitation has been rightly invoked.
Heard the parties. Considered the submissions.
In this case the activity undertaken by the appellant is only supervision of fabrication and erection of supporting structures and equipments. From
the records it does not reveal that appellant is providing any other assistance to their clients or appellant is providing any kind of advice to their clients.
In the factual matrix, it cannot be termed that appellant is providing technical assistance to their clients. Consequently, the activity of the appellant does
not fall under the category of Management Consultancy Services. Further, we find that in the show cause notice there is no allegation of fraud,
collusion, suppression, willful misstatement and suppression of fact by the appellant and it has not been alleged that appellant was having any malafide
intentions not to pay any service tax. In these circumstances, extended period of limitation was also not invokable.
Consequently, the appellant succeeds on merits as well as limitation.
In these terms, we set aside the impugned order and allow the appeal with consequential relief if any.
(Dictated and pronounced in the open court)