PER : P. KARTHIKEYAN
The impugned order sustained demand of service tax under the category of Consulting Engineer service rendered by the appellants during the period 2003-04 to 2005-06. It was found that the appellants had incurred liability to service tax of Rs. 5,37,577/- during the material period. The original authority had also demanded applicable interest and imposed penalties under Sections 76, 77 and 78 of the Finance Act, 1994. Vide the impugned order, the Commissioner (Appeals) vacated penalties imposed on the appellants but sustained demand of service tax and interest.
2. Moving the application for waiver of pre-deposit and stay of recovery of the dues, learned Counsel for the appellants reiterated the submissions made before the lower authority to the effect that the appellants were engaged in providing Survey and Map-making Services’ (SMS for short). They had been engaged by Government agency and the impugned activities are part of the Government projects. He submits that the activity of ‘survey and map making’ came under service tax net with effect from 16.6.2005. Therefore, the impugned demand for the period 2003-04 to 2005-06 under the category of ‘Consulting Engineer’ service was not sustainable. He also submits that the definition of ‘Survey and Map-making service’ under Section 65 (105 (zzzc) reads thus :
‘Service provided or to be provided to any person, by any other person, other than by an agency under the control of, or authorized by, the Government, in relation to survey and map-making.’
It is submitted that 95% of the work carried out by the appellants were for Government departments and that these activities did not attract service tax. Moreover, the impugned activities attracted service tax only with effect from 16.6.2005.
3. Ld. JDR submits that the appellants were engaged in providing services under the category ‘Consulting Engineer’. In any case, the claim of the appellants is that the impugned activity was not taxable and that they were not providing ‘consulting engineer’ services is not substantiated.
4. On a perusal of the records and considering the rival submissions, we find that prima facie the activities undertaken by the appellants are classifiable under ‘Survey and Map-making Services’. We find considerable force in the plea of the appellants that by virtue of definition of SMS in the Act, the impugned activities carried out by the appellants for the Government department were not exigible under that entry. The impugned order held that the appellants had rendered ‘Consulting Engineer’ service. We find that, prima facie, this finding is incorrect. The tax liability and interest sustained by the impugned order is not quantified. In the circumstances, we find that the appellants have made out a strong prima facie case for waiver of pre-deposit of the dues adjudged. The application for waiver of pre-deposit of the dues adjudged against the appellants is allowed and recovery thereof stayed pending decision in the appeal.
(Pronounced and dictated in the court)