ORDER
S.L. Peeran, Member (J)
1. Both this appeal raises a common question of facts and hence, they are taken up for disposal as per law.
2. Appeal No. E/275/2006 arises from Order-in-Original No. 19/2006 dated 28.2.2006 and Appeal No. E/281/2006 arises from Order-in-Original No. 58/2006 dated 26.9.2006 passed by the Commissioner of Service Tax, Bangalore.
3. The appellants were registered under the category of ‘Consulting Engineer’ and were paying Service Tax. Revenue has proceeded to consider the activity of appellant engaged in the business of software sales, development, maintenance, consultancy and training to come within the category of ‘Management Consultancy’. In regard to the operationalisation of R/3 application software, which is used to integrate various business functions such as inventory management, quality management, sales and distribution, etc., with the main financial system of the user. The similar matter in assessee’s own case came up for consideration before this bench and by Final Order No. 1615 dated 14.8.2006, Tribunal after due consideration accepted the assessee’s plea that they fall under the category of ‘Consulting Engineer’ and the plea of revenue that they are to be categorized under ‘Management Consultancy’ was not accepted.
4. The learned Counsel furnishes the copy of the above noted judgment. The issue being covered by the cited final order will apply to the facts of this case. He submits that the Tribunal disposed of the matter pertaining to earlier period and the present appeal pertains to the subsequent period and the issue being common, therefore he prays for allowing the appeal.
5. The learned JDR files the cross objection and contends that the services carried out by the appellants falls under the definition of ‘Management Consultancy’. Therefore, the appellants should discharge the Service Tax under the ‘Management Consultancy’ category.
6. On a careful consideration, we find that in assessee’s own case pertaining to previous period the issue has been decided by this bench in assessee’s favour by the noted final order. The finding recorded in the Para 6 of the above final order is reproduced herein below.
6. We have gone through the records of the case carefully. CESTAT, Chennai in the appellant’s own case, passed the Final Order (No. 1416/2005 dated 06.10.2005) in Appeal S/73/2005/MAS arising out of OIA No. 284/2003-CE dated 26.09.2003 passed by the Commissioner of Central Excise (Appeals), Bangalore. Paras 2 and 3 of the said Final Order are extracted herein below:
2. The present appeal is against demand of service tax on the service of Consulting Engineer, from the appellants, for the period 7.7.1997 to 27.02.1999.
3. After examining the records and hearing both sides, we find that the short question arising for consideration is whether the service rendered by Software Engineer could be considered to be service rendered by a Consulting Engineer. In the impugned order, the ld. Commissioner (Appeals) has lucidly dealt with the issue as under:
However, it is evident that apart from licensing/sale of software, the appellant has to undertake quite a lot of activities, which are advisory in nature. These activities though inextricably connected with sale/licensing of software, are in the nature of services. These services involve consultation and advice. In developing and licensing for software business applications, the appellants have to employ a large number of qualified engineers apart from other professionals. In order to install their software in a particular industry/company, they have to provide a lot of advise related to software engineering. It should be borne in mind that the scope of consulting engineers is not limited only to the traditional branches of engineering such as mechanical, electrical and civil. Engineering techniques are applied even in management. In this sense, software engineers would also come within the ambit of Consulting Engineers as per the Finance Act, 1994. Apart from this, from the very fact that the Government of India chose to issue an exemption Notification on 28.2.1999 services rendered by Consulting Engineers in relation to Software clearly indicates that the Government of India has recognized the Software Engineers also as Consulting Engineers.
We have no reason to disagree with the above view, which is well-considered. Accordingly, the impugned order is affirmed and this appeal is dismissed.
From the above order, it is seen that in respect of the appellant, the Tribunal has held that the services rendered by them amount to Consulting Engineer services. In these circumstances, as rightly contended by the appellant, the order of the Assistant Commissioner purported to be reviewed by the Commissioner of Services Tax merges with the above mentioned order of the Tribunal. Therefore, we have no other option but to allow the appeal with consequential relief and set aside the impugned OIO.
We have carefully considered the submissions and we are not in a position to take a different view then the view already expressed as noted supra. The issue is fully covered in assessee’s favour, therefore, the impugned orders are set aside and appeals are allowed with consequential relief, if any.
(Pronounced and dictated in open Court)