2014 (8) TMI 543 - AT - Service Tax

Activity of field verification of the credibility of borrowers - Scientific and technical consultancy - Held that - Authority proceeded to treat the appellant as provider of scientific and technical consultancy service without testing the activity carried out by the appellant to determine whether covered by the class of service under which Revenue proposed to bring the appellant. We therefore looked into show cause notice. Show cause notice is also premeditated one to raise demand against the appellant without exhibiting the activity carried out by the appellant. This clearly shows that adjudication was made in vacuum and suffers from legal infirmity of violation of natural justice without any foundation in the show cause notice - Decided in favour of assessee.

Summary

The Appellate Tribunal CESTAT NEW DELHI ruled in favor of the appellant, stating that they were unreasonably taxed for providing field verification services, not scientific and technical consultancy as defined by the Finance Act, 1994. The authorities failed to properly assess the appellant's activities before imposing tax, leading to a violation of natural justice. The orders of both authorities were set aside, and the appeal was allowed.