2018 (9) TMI 649 - AT - Service Tax

Scope of SCN - order in original traveled beyond the Show Cause Notice - in the order in original the demand was confirmed under the head of Business Auxiliary Service, whereas in the SCN, the demand of Service Tax was proposed under Advertising Services. Held that - From the reading of both the paragraph of the Show Cause Notice as well as order in original it is clear that in the Show Cause Notice, the demand was proposed, considering the service of Advertising Service, Whereas in the order in original, the demand was confirmed under Business Auxiliary Service. Accordingly, the order in original traveled beyond the Show Cause Notice which is not permissible under the settled Law by the various Court - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
1. Discrepancy between demand proposed in Show Cause Notice and confirmed in the order.
2. Taxability of incentive received from print media.
3. Sustainability of demand under Business Auxiliary Service.

Analysis:
1. The appellant provided advertising services and received incentives from Advertising Agency and Print Media. The department proposed a demand of Service Tax under Advertising Service, but the order confirmed the demand under Business Auxiliary Service. The appellant argued that the order exceeded the Show Cause Notice scope. The Tribunal agreed, stating that the demand confirmed differently from what was proposed is unsustainable under settled law. Citing relevant judgments, the Tribunal set aside the demand solely on this ground without delving into the case's merits, ultimately allowing the appeal.

2. The appellant contended that the incentive received from print media was not taxable. However, the Deputy Commissioner for Revenue reiterated the impugned order's findings. Despite this, the Tribunal did not delve into the taxability of the incentive received from print media as it set aside the demand solely based on the discrepancy between the proposed and confirmed heads of taxation.

3. The Tribunal highlighted that the Show Cause Notice proposed the demand under Advertising Services, while the order confirmed it under Business Auxiliary Service. This discrepancy led the Tribunal to conclude that the order exceeded the Show Cause Notice's scope, rendering the demand unsustainable. By setting aside the demand on this procedural ground, the Tribunal did not delve into the merits of the case, ultimately allowing the appeal and overturning the impugned order.