P.G. Chacko, Judicial Member - After examining the records and hearing both sides, we are of the view that the appeal itself requires to be finally disposed of at this stage. Accordingly, after dispensing with predeposit, we take up the appeal.

2. The original authority had demanded Service-tax from the appellants for the period November 2002 to July 2004 in respect of a service received by them from their foreign collaborators. This service was held to be "Consulting Engineer’s Service" by that authority. Aggrieved, the assessee preferred an appeal to the Commissioner (Appeals) and also filed therewith an application for waiver of predeposit and stay of recovery under section 35F of the Central Excise Act, read with section 83 of the Finance Act, 1994. Ld. Commissioner (Appeals) considered that application and directed predeposit of Rs. 5 crores, which was subsequently reduced to Rs. 1 crore, which was required to be deposited on or before 13-2-2006. The party did not deposit this amount within the appointed date. Consequently, their appeal itself happened to be dismissed for want of compliance with section 35 of the Central Excise Act. Hence the present appeal.

3. Ld. Counsel has submitted that, as the appellant had a prima facie case against the demand of service tax, ld. Commissioner (Appeals) ought not to have directed any predeposit. He has elaborated this point by submitting that the service received by the assessee from the supplier of technical know-how was not in the nature of "Consulting Engineer’s Service" as held by the department. Ld. SDR, on the other hand, submits that the above service received by the assessee was in the nature of "Scientific or Technical Consultancy", which was taxable with effect from 1-7-2003, but the assessee did not care to pay such tax even from that date.

4. The reference made by ld. SDR is to the following provision under section 65 of the Finance Act, 1994 :-

"Scientific or Technical Consultancy means any advice, consultancy or scientific or technical assistance rendered in any manner either directly or indirectly by a scientist or a technocrat or any science or technology institution or organization, to a client in one or more disciplines of science or technology."

It appears from the records, however, that the relevant show-cause notice did not care to claim that, from 1-7-2003 the assessee was availing "Scientific or Technical Consultancy" from their foreign collaborator. It, on the other hand, maintained that the assessee was availing "Consulting Engineer’s Service" throughout the period of dispute. It has been consistently held by this Tribunal that providing technical know-how is not to be equated with providing Consulting Engineer’s Service. Thus the assessee has prima facie case against the demand of Service Tax and against the penalty. Ld. Commissioner (Appeals) ought to have dispensed with predeposit.

5. In the aforesaid circumstances, we set aside the impugned order and allow this appeal by way of remand, directing ld. Commissioner (Appeals) to dispose of the assessee’s appeal on merits in accordance with law and the principles of natural justice without insisting on any predeposit.