CONSULTING ENGINEERS GROUP LTD vs JAIPUR I..

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI

PRINCIPAL BENCH,
COURT NO. III

SERVICE TAX APPEAL NO. 52720 OF 2018

[Arising out of the Order-in-Appeal No. 340-341 (SM) ST/JPR/2018 dated
16/05/2018 passed by The Commissioner (Appeals), Central Excise, Jaipur.]

M/s Consulting Engineers Group Ltd., Appellant
E-12, Mozi Colony, Malviya Nagar,
Jaipur (Raj.).

VERSUS

Commissioner (Appeals), Respondent
Central Excise & CGST
Commissionerate,
Jaipur I.

Appearance

Shri Jatin Mahajan and Shri Arjun Singh Rathore, Advocates for
the appellant.
Shri Mahboob Ur Rehman, Authorized Representative for the
Department

CORAM:
HON’BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
HON’BLE SHRI P.V. SUBBA RAO, MEMBER (TECHNICAL)



FINAL ORDER NO. 51668/2026

DATE OF HEARING : 10.09.2026
DATE OF DECISION : 05.11.2026
P.V. SUBBA RAO

1
M/s Consulting Engineers Group Ltd. has filed this
appeal to assail the order-in-appeal dated 16.5.2018 passed by
2
the Commissioner (Appeals) in the de novo proceedings.


1. appellant
2. impugned order

2 ST/52720 OF 2018
2. The appellant had service tax registration and provided
consulting engineers services as defined in section 65 (31) read
3
with section 65 (105) (g) of the Finance Act, 1994 to the
National Highways Authority of India (NHAI) during the period
July 2003 to September 2005. The appellant raised invoices and
paid service tax on the gross amounts charged up to June 2003.
Thereafter, they paid service tax only on the remuneration
received for local professional staff and support staff but did not
pay service tax on the amounts received under various other
heads viz., transportation, duty travel to site, office rent, office
supplies, utilities & communication, reports and document
printing and other costs and contingencies, etc.

4
3. Therefore, five show cause notices were issued to the
appellant for different periods demanding, in all, service tax of
Rs. 1,01,01,701/-. The demands were confirmed by the
Additional Commissioner by order dated 7.8.2006. On appeal, the
Commissioner (Appeals) passed order dated 28.2.2007 assailing
which both Revenue and the assessee filed appeals before this
Tribunal. Both appeals were disposed of by this Tribunal’s Final
Order dated 12.12.2011 remanding the matter to the
Commissioner (Appeals).

4. The order impugned in this appeal was passed in the
remand proceedings and he confirmed demand of service tax of

3. Act
4. SCN

3 ST/52720 OF 2018
only Rs. 63,07,016/- for the period July 2003 to September
2005.

Submissions of the appellant
5. Learned counsel for the appellant made the following five
submissions:
(i) The appellant is a body corporate as is evident. Bodies
corporate were brought within the ambit of consulting
engineers through an amendment with effect from
1.5.2006.
(ii) Service tax was not payable by bodies corporate on
consulting engineers service before 1.5.2005.In the
appellant’s own case, this Tribunal, by order dated
15.5.2014 ( Commissioner of C.E Jaipur I versus
5
Consulting Engineers Group Ltd. ) held so and the
Commissioner committed grave injustice in not
following the order of this Tribunal.
(iii) Reimbursable expenses do not form part of the value
for the purpose of service tax as held in Scott Wilson
6
Kirpatric (I) Pvt. Ltd. versus CCE by this Tribunal
and affirmed by the Supreme Court. For this reason,
reimbursable expenses cannot be included in the
assessable value to determine the tax liability.
(iv) The services provided by the appellant were exempted
as they were provided to a government entity.

5. 2014 (36) STR 634 (Tri-Del.)
6. 2007(5) STR 118(Tri-Bang)

4 ST/52720 OF 2018
(v) The appeal may be allowed and the impugned order
may be set aside.

Submissions of the Revenue
6. Learned authorised representative for the Revenue
submitted that while it is true that bodies corporate were
explicitly brought within the definition of ‘consulting engineers’
through an amendment in 1.5.2005, the expression ‘person’
before the amendment also included bodies corporate. Therefore,
companies were never excluded from the definition of ‘consulting
engineers’. In the case of Sepco Electric Power Construction
7
Corporation versus CCE, Raipur , this Tribunal took a view that
before the amendment in 2005, bodies corporate were not
covered within the definition of ‘consulting engineers’. Revenue
appealed against the decision and through a detailed order,
Hon’ble Supreme Court has in Commissioner of Central
Excise, Raipur versus SEPCO electric power construction
8
corporation set aside the order of this Tribunal and held that
even before the amendment, bodies corporate, being persons,
were covered within the definition of consulting engineers.

7. Therefore, there is no infirmity in the impugned order.

8. We have considered the submissions advanced by both
sides and perused the records.


7. 2016 (42) S.T.R. 37 (Tri. – Del.)
8. 2022(62) GSTL 385(SC)

5 ST/52720 OF 2018
9. We find that the Supreme Court has, in SEPCO Electric
Power Construction Corporation held that bodies corporate
were covered under the definition of consulting engineers even
before the amendment in 2005. Therefore, all contrary decisions
by this Tribunal or any High Court stand overruled on this
question of law.

10. The second submission of the appellant is that no service
tax needs to be paid on reimbursable expenses. We find that the
dispute was only with respect to such expenses. It is true that
while Rule 5 of the Service Tax Valuation Rules did provide for
inclusion of such expenses in the taxable value, the Delhi High
Court has, in Intercontinental Consultants and Technocrats
9
Pvt. Ltd versus UOI held that Rule to be ultra vires of section
10
67 of the Act. This decision was upheld by the Supreme Court .
Later, in 2015, section 67 was amended to include reimbursable
expenses in the taxable value.

11. The present demand was for the period before 2015 on
reimbursable expenses.





9. 2013 (29) S.T.R. 9 (Del.)
10. 2014 (35) S.T.R. J99 (S.C.)

6 ST/52720 OF 2018
12. In view of the above, we allow the appeal and set aside the
impugned order.
(Order pronounced in open court on 05/11/2026.)




(ASHOK JINDAL)
MEMBER (JUDICIAL)



(P.V. SUBBA RAO)
MEMBER (TECHNICAL)
PK