Per T.K. Jayaraman, Technical Member.-The appellants entered into an agreement with M/s. Karnataka Electronics, Peenya Industrial Estate, Bangalore to render the following services :

(1)Finance, including wherever necessary, assisting in discussions and negotiations with the financial institutions.

(2)Purchase of new materials and consumables at economical prices by identifying new suppliers.

(3)Finding new markets for the assessee’s products.

(4)Marketing strategies and advertisement programmes.

(5)Efficient way of production by upgrading techno-logy and optimizing production techniques.

(6)Human Resource Development areas and helping in hiring and training of new people.

2. Revenue issued show cause notice dated 24-7-2003 for demand of Service Tax under the category of Management Consultant with effect from 16-10-1998. The Service Tax at the rate of 5% for the period from October 1998 to May 2002 worked out to Rs. 4.62 lakhs for the above-mentioned services provided by the appellant to M/s. Karnataka Electronics, Peenya. Further, it was noticed that the appellant received an amount of Rs. 1,85,715 during 1999-2000 and Rs. 3,10,210 during 2000-01 from M/s. Maini Material Movement (P