2017 (9) TMI 1498 - AT - Service Tax

Scope of SCN - Rent-A-Cab Scheme Operator s Service - Held that - the SCN raised the demand of ₹ 42,21,400/- under Rent-A-Cab Scheme Operator s Service . The original authority confirmed the demand under Rent-A-Cab Scheme Operator s Service and Learned Commissioner (Appeals) has held that out of the said demand ₹ 11,28,095/- was liable to be upheld under Transport of Goods by road - such finding that the appellant was required to pay service tax of ₹ 11,28,095/- on transport of goods by road is beyond the proposal in the SCN - impugned order set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Liability to pay Service Tax under 'Rent-A-Cab Scheme Operator's Service'
2. Recalculation of Service Tax liability under the category of transport of goods by road

Analysis:
Issue 1: The appellant was issued a show cause notice for not paying Service Tax amounting to ?42,21,400 under the 'Rent-A-Cab Scheme Operator's Service' for the period from 01/04/2008 to 31/03/2012. The original authority confirmed the demand, stating that the appellant failed to provide supporting documentation for heavy vehicle transportation for Defence. The Commissioner (Appeals) recalculated the liability to ?11,28,095 under the category of transport of goods by road, which was contested by the appellant. The Tribunal found that the demand of ?11,28,095 for transport of goods by road was beyond the scope of the show cause notice and set aside this part of the order. The Tribunal modified the Order-in-Appeal accordingly, granting relief to the appellant.

Issue 2: The key contention raised by the appellant was that the demand of ?11,28,095 under the category of transport of goods by road was not part of the original show cause notice. The Tribunal agreed with this argument, stating that the proposal in the show cause notice was specific to the 'Rent-A-Cab Scheme Operator's Service'. As the demand for transport of goods by road was not included in the original notice, the Tribunal set aside the Commissioner (Appeals)'s decision upholding this demand. Consequently, the Tribunal allowed the appeal and directed that the appellant is entitled to consequential relief as per law.

This judgment highlights the importance of adherence to the scope of show cause notices in tax matters and the need for authorities to base their decisions on the issues raised in such notices. The Tribunal's decision emphasizes the principle of natural justice and the requirement for tax demands to be in line with the allegations made in the original communication to ensure fairness and procedural regularity in tax proceedings.