2015 (12) TMI 274 - AT - Service Tax

Discrepancy in issuing Show Cause Notice - Business Auxiliary Service to its customers on behalf of Mobile Company - Buying and selling of goods - Held that - Primary adjudicating authority had dropped the proceeding initiated vide show cause notice dated 7.6.2005 on the ground that the appellant was engaged in buying and selling the Mobile Company s products and there was no material evidence available on record of providing taxable service and no amount of service charges or service tax has been quantified in the show cause notice. We find that the Order-in-Review also does not quantify the value of service or the amount of service tax nor does it quantify the amount of penalty. Certainty is a non negotiable requirement in the tax proceedings and in the absence of any quantification of the value of service, the amount of service tax or penalty the order is to be treated as bad in law and hence non sustainable. Therefore, we refrain from analyzing whether the service rendered by the appellant actually falls under Business Auxiliary Service in the wake the appellant s of contention that what was done was sale/purchase of recharge coupons and there was no service rendered. - Impugned order is unsustainable - Decided in favour of assessee.

Summary

Issues:
1. Appeal against Order-in-Review setting aside Order-in-Original dated 1.3.2007.
2. Existence of service in sale and purchase of goods.
3. Non-quantification of demand and penalty in the order.
4. Allegation of providing Business Auxiliary Service.
5. Annulling Order-in-Original and invoking extended period for service tax evasion.
6. Imposition of penalty under various sections of the Finance Act.

Analysis:
1. The appeal was filed against the Order-in-Review dated 25.2.2009, which had set aside the Order-in-Original dated 1.3.2007. Due to the absence of representation from the appellant during the hearing, the tribunal proceeded to decide the appeal.

2. The learned Authorized Representative (AR) argued that although there was sale and purchase of goods, the existence of service should not be denied. It was contended that the non-quantification of the demand and penalty should not invalidate the order.

3. The tribunal examined the papers and found that the appellant was accused of providing Business Auxiliary Service to customers on behalf of a "Mobile Company" as a direct selling agent, for which it received commission/incentives. The Revisionary Authority annulled the Order-in-Original and invoked the extended period for deliberate suppression of service tax liability.

4. The primary adjudicating authority had initially dropped the proceedings based on the lack of evidence of providing taxable service and the absence of quantification of service charges or tax in the show cause notice. The Order-in-Review also failed to quantify the value of service, service tax, or penalty, leading to a lack of certainty in the tax proceedings.

5. The tribunal concluded that without quantification, the order could not be sustained in law. Therefore, the tribunal refrained from determining whether the service provided fell under Business Auxiliary Service, as contended by the appellant, and decided to allow the appeal, finding the Order-in-Review unsustainable.

This detailed analysis highlights the key issues raised in the legal judgment and the tribunal's reasoning behind allowing the appeal based on the lack of quantification and certainty in the tax proceedings.