COMMISSIONER OF SERVICE TAX Vs. SCOTT WILSON KIRKPATRICK INDIA PVT LIMITED

JUDGEMENT

(1.) This appeal is by the revenue challenging the order passed by the Tribunal that the demand of differential tax both on merits and on limitation and accordingly has set aside the order passed by the assessing officer as well as the first Appellate Authority.

(2.) M/s Scott Wilson Kirkpatrick (India) Private Limited - the Assessee is providing taxable services under the category of 'Consulting Engineer Service' and are duly registered under the Finance Act, 1994. The Assessee entered into a contract agreement captioned as 'Project Coordinating Consultancy Services for Karnataka State Highways Improvement Project'. In pursuance of the said agreement, the Assessee provided services like project preparation which includes feasibility study, screening of the roads, identify analysis and developmental proposals for institutional measures and such other engineering consultancy services which are more descriptively mentioned in the Appendix A of the said agreement. In terms of the said agreement, the Assessee billed/charged gross amount of Rs. 30,02,26,393/-from their clients both in local currency and in foreign currency. The value of taxable service rendered i.e., an amount of Rs. 22,15,54,047/- in local currency and an amount of Rs. 7,86,72,346/- in foreign currency for the period from 1.3.1999 to 31.3.2004. The Assessee was required to pay service tax of Rs. 1,57,03,274/- on the above value of taxable service at the rate of 5% till 13.5.2003 and 8% from 14.5.2003. However, the Assessee had paid only a sum of Rs. 43,21,264/-. There was a short payment of service tax to the extent of Rs. 1,13.82,010/-. Therefore, a show cause notice was issued on 11.8.2004 requiring the Assessee to show cause why action should not be taken as mentioned in the said notice being the value of taxable service escaped assessment or has been under-assessed, short payment of service tax, interest, penalty, etc.,

(3.) The Assessee filed a reply denying those claims. Over-ruling the objections of the Assessee, the assessing officer passed an order on 17.5.2005 holding that the claim is well within time demanding service tax of Rs. 1,13,82,010/-and appropriated an amount of Rs. 30,13,450/- paid towards the service tax liability, demanded interest under Section 75 of the Act and imposed penalty equal to that of the tax payable.