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July 2011

(2011) 22 STR 421 (Tri.-Delhi) Punjab Engineering College v. CCEx., Chandigarh.

By Puloma Dalal
Jayesh Gogri
Chartered Accountants
Reading Time 1 mins
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Consulting Engineer’s Service — Liability of educational institution — Appellant is an engineering college providing technical assistance to the needy in respect of technical aspects by its engineering faculty — No evidence that appellant institute was an engineering consultant providing engineering consultancy service.

Facts:
The appellant being an engineering college provided technical assistance to the needy in respect of technical aspects by its engineering faculty. The Commissioner illustrated the meaning of ‘scientific or technical consultancy’ and ‘consulting engineering services’ in the review order. An institution providing scientific or technical advice or such assistance falls under the purview of ‘scientific or technical consultancy service’, similarly engineering services provided by a commercial establishment fall under ‘Engineering Consultancy’.

Held:
The appellant’s institute is not said to be an ‘engineering consultant’. Service tax is levied on value of economic services which are commercially feasible and are consumed by the recipient with a clear object to pay for commercial services. The appellant does not serve such purpose and cannot be brought in the fold of taxation in disguise. Setting aside the review order, the appeal was allowed.

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