COMMISSIONER OF CENTRAL EXCISE, RAIPUR versus M/S SEPCO ELECTRIC POWER CONSTRUCTION CORPORATION

Citation: [2022] 17 S.C.R. 1 · Decided: 11-07-2022 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Case Partly allowed

Cited by 4 judgment(s) · cites 6 · see the full citation network in Lexace

Judgment (excerpt)

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   [2022] 17 S.C.R. 1
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COMMISSIONER OF CENTRAL EXCISE, RAIPUR
v.
M/S SEPCO ELECTRIC POWER CONSTRUCTION
CORPORATION
(Civil Appeal No.4928 of 2018)
JULY 11, 2022
[M. R. SHAH AND SANJIV KHANNA, JJ.]
Finance Act, 1994: s.65(31) – Service Tax – Definition of
“consulting engineer” u/s. 65(31) of the Act – Whether ‘body
corporate’ is covered within its sweep prior to 2005 amendment –
Held: Even before the 2005 amendment, the term ‘consulting
engineer’ included “body corporate” – Even in s.3(42) of the General
Clauses Act, 1897, the word “person” includes any company or
association or body of individuals, whether incorporated or not –
Therefore, there is no logic and/or reason to exclude a” body
corporate” from the definition of “consulting engineer” and to
exclude the services of a “consulting engineer” rendered by a “body
corporate” to exclude and/or exempt from the service tax net – Such
an interpretation would lead to anomaly and absurdity – It will create
two different classes providing the same services which could not
be the intention of the Parliament/Legislature – General Clauses
Act, 1897 – s.3(42).
Partly allowing the appeal and remitting the matter to
CESTAT, the Court
HELD : 1.1. Prior to amendment 2005, by Circular/Trade
Notice dated 4.7.1997, the definition of “consulting engineer”
under the Finance Act, 1994 was specifically explained and as
per the said Trade Notice, “consulting engineer” means any
professionally qualified engineer or engineering firm who, either
directly or indirectly, venders any advice, consultancy or technical
assistance in any manner to a client in one or more disciplines of
engineering. It also further clarified that “consulting engineer”
shall include self-employed professionally qualified engineer who
may or may not have employed others to assist him or it could an
engineering firm – whether organised as a sole proprietorship –
partnership, a private or a Public Ltd. company. It can be seen
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SUPREME COURT REPORTS
[2022] 17 S.C.R.
that it was never the intention of the legislation to exclude a “body
corporate” from the definition of “consulting engineer” and from
the “service tax net”. [Para10][18-A-C]
1.2 In many places under the Finance Act, 1994, the
Parliament/Legislature has used the word “person” (Sections 68,
69 and 70). At this stage, Section 3(42) of the General Clauses
Act, 1897 is also required to be referred to, considered and
applied. The word “person” includes any company or association
or body of individuals, whether incorporated or not. Therefore,
there is no logic and/or reason to exclude a” body corporate”
from the definition of “consulting engineer” and to exclude the
services of a “consulting engineer” rendered by a “body
corporate” to exclude and/or exempt from the service tax net.
Such an interpretation would lead to anomaly and absurdity. It
will create two different classes providing the same services which
could not be the intention of the Parliament/Legislature. [Para
11][33-F-H]
1.3 Under the Finance Act, 1994, in the definition of
“consulting engineer”, a “body corporate” is included and/or to
be read into so as to bring a “body corporate” being a service
provider providing the consultancy engineering services within
the service tax net, as such, it is not necessary to consider whether
the subsequent amendment amending the definition of “consulting
engineer” by way of 2005 amendment adding a “body corporate”
within the definition of “consulting engineer” would be
retrospective and/or whether it can be said to be a clarificatory in
nature or not and the said issue would become academic now.
[Para 12][34-B-D]
1.4 The respondent, being a service provider providing
consultancy engineering services, was/is liable to pay the service
tax for such services being “consulting engineer” within the
definition of Section 65(31) of the Finance Act, 1994 and therefore
and thereby liable to pay the service tax under Section 66 r/w
Section 68 of the Finance Act, 1994. However, from the impugned
judgment and order passed by the CESTAT, it appears that the
CESTAT has considered only one issue namely whether for the
period pre 01.05.2006 – the Finance Bill, 2006 whether “body
corporate” was covered within the definition of “consulting
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engineer” under Section 65(31) of the Finance Act, 1994 and had
not considered any other issues/grounds raised in the Memo of
Appeal before the CESTAT. Therefore, the matter is remanded
to the

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