TIRATH SINGH THAKUR, J. - In this petition for a writ of certiorari, the petitioner has called in question the validity of an order dated 18th/24th of November, 1999 passed by the Additional Commissioner, Central Excise, Bangalore demanding payment of service tax and imposing penalties for the defaults committed by the former. A declaration to the effect that the petitioner-company is not a "consulting engineer" within the meaning of section 65 of the Finance Act, 1994 so as to be liable to pay tax on the "service" provided by it has also been prayed for besides a certiorari quashing circular dated 22nd of July, 1997 issued by the Ministry of Finance and referred to in trade Notice No. 78/97 dated 4th of July, 1997 emanating from the office of the Commissioner of Central Excise, Bangalore.

The petitioner-company is a division of Tata Sons Limited engaged in the development of computer software. Upon the introduction of service tax under Chapter V of the Finance Act, 1994, it appears to have applied for and secured registration as a consulting engineer in terms of a certificate dated 9th of January, 1998. The Central excise authorities being of the opinion that the petitioner was engaged in providing "taxable service" as a consulting engineer called upon the company to furnish details of the value of the service rendered for the period 7th of July, 1997 to 30th of September, 1998. In reply, the company appears to have argued that in terms of a resolution of the Planning Commission published in a Gazette of India, Extraordinary, Part I, dated 25th of July, 1998, service tax was not applicable to computer software development industries. This was followed by another letter dated 25th of January, 1999 from the petitioner, in which it was contended that since the petitioner was a division of Tata Sons Limited, it did not fall within the purview of the expression "consulting engineer" as defined in clause (13) of section 65 of the Finance Act, 1994. The respondents remained dissatisfied with these explanations resulting in the issue of a summon dated 7th of February, 1999, by which the petitioner-company was called upon to produce the books of account for certification and determination of the tax liability. While certain books of account appear to have been produced by the petitioner, it stuck to its stand that the company was not liable to pay any service tax. Reliance was also placed by the petitioner upon a notification dated 28th of February, 1999 in support of the contention that the computer software industries like the petitioner were exempt from payment of service tax and that the exemption granted under the said notification related back to the date the tax was initially levied. The Additional Commissioner of Central Excise was not impressed with the contentions urged on behalf of the petitioner and upon scrutiny of the invoices produced by the petitioner prima facie came to the conclusion that the petitioner had either suppressed or concealed the value of taxable service with an intent to evade payment of the same. The petitioner was accordingly called upon to show cause as to why it should not be held liable to pay service tax as a consulting engineer and an amount of Rs. 9,88,379 recovered from it for the period mentioned earlier in terms of section 68 of the Finance Act, 1994. It was also called upon to show cause why interest at the rate of 5 per cent per month be not demanded in terms of section 75 of the Act aforementioned and penalties in terms of sections 76, 77 and 78 thereof be not levied.

In response, the petitioner filed a detailed reply reiterating over again that the liability to pay service tax under the Act arose only if the consulting engineers were providing taxable service in a proprietary capacity or as a partnership concern comprising qualified engineers. Since the petitioner-company did not answer either of the said two descriptions, it was not liable to pay any tax. The explanation set out the