2015 (12) TMI 164 - AT - Service Tax

Demand of service tax - Business Support service - order beyond the scope of show cause notice - Held that - Services provided by the appellants do not fall within the category of support services for business or commerce. As a consequence of this finding since the proceedings were initiated only on the allegation that appellants had provided services of support of business or commerce, the proceedings should have been dropped. However, the lower appellate authority proceeded to analyze the nature of the services and concluded that the appellant had provided business auxiliary service and confirmed the demand assessed by the primary authority. - Since the demand was confirmed by the impugned order on a class of taxable service which was not alleged in the show cause notice, the demand cannot be sustained - Decided in favour of assessee.

Summary

Issues:
1. Appeal against service tax demand confirmation.
2. Classification of services provided by the appellant.
3. Allegation of providing support services of business or commerce.
4. Nature of services provided by the appellant.
5. Validity of demand confirmed by the impugned order.

Analysis:
1. The appeal was filed against the confirmation of a service tax demand of Rs. 6,04,130 along with interest and penalties under Sections 76 and 77 of the Finance Act, 1994. The appellant was licensed to provide specific services on trains under an agreement with the Indian Railway Catering and Tourism Corporation Ltd. (IRCTC) during January 2009 to September 2009, for which consideration was received.

2. The primary adjudication authority classified the services provided by the appellant as support services of business or commerce, leading to the initiation of proceedings. However, the lower appellate authority in the impugned order found that the services did not fall under this category. Despite this, the lower appellate authority concluded that the appellant had provided business auxiliary service and confirmed the demand assessed by the primary authority.

3. The appellant argued that since the demand was confirmed on a class of taxable service not alleged in the show cause notice, it could not be sustained. Referring to a previous Tribunal decision in a similar case involving the same appellant, it was highlighted that the order by the lower appellate authority was quashed due to a similar discrepancy.

4. Considering the above, the Tribunal quashed the impugned order, allowing the appeal. It was emphasized that since the proceedings were initiated based on the allegation of providing support services of business or commerce, and the lower appellate authority found otherwise, the demand could not be upheld. The decision was made in line with the principles of natural justice and consistency in applying tax laws.

5. In conclusion, the appellant succeeded in challenging the demand based on the misclassification of services, leading to the quashing of the impugned order by the Tribunal. The judgment highlighted the importance of adherence to procedural fairness and consistency in tax assessments.