2018 (9) TMI 658 - AT - Service Tax

Reverse charge mechanism - service of Technical Testing, Business Exhibition And Legal Consultancy services received from abroad - section 66A of Finance Act, 1994 read with section 2(1)d(iv) of Service Tax Rules, 1994 - scope of SCN - Held that - We find in the SCN that the service in question were not explicitly classified under particular head, moreover the adjudicating authority in the Order in Original also not decided the classification of the service, since the issue of classification depends on the nature of service, the adjudicating authority should have verified all the documents and come to the conclusion that what should be the classification of the service. The matter needs to be re-considered by the Original Authority - appeal allowed by way of remand.

Summary

Issues:
1. Taxability of Technical Testing, Business Exhibition, and Legal Consultancy services received from abroad under section 66A of Finance Act, 1994 read with section 2(1)d(iv) of Service Tax Rules, 1994.

Analysis:
The judgment involved two appeals arising from a common impugned order passed by the Commissioner (Appeals) concerning the taxability of services received from abroad. The issue revolved around whether services like Technical Testing, Business Exhibition, and Legal Consultancy are taxable under specific provisions of the Finance Act and Service Tax Rules. The Original Authority had confirmed the demand for the period in question, which was subsequently upheld by the Commissioner (Appeals).

The appellant's counsel argued that the adjudicating authority failed to classify the services properly, leading to an incorrect categorization under Business Auxiliary Services. The counsel contended that each service should be classified separately under relevant sections, making the demand unsustainable under Business Auxiliary Services. On this basis, the impugned order was deemed not sustainable.

On the other hand, the Revenue representative supported the findings of the impugned order, stating that the demand was rightly confirmed as all services received were taxable. It was clarified that the demand was not raised specifically under Business Auxiliary Services, thus justifying the confirmation of the demand under the appropriate category.

Upon careful consideration, the Tribunal observed that the service in question was not explicitly classified in the Show Cause Notice (SCN) or the Order in Original. Given that the classification of services depends on their nature, the adjudicating authority should have examined all relevant documents to determine the correct classification. Therefore, the matter was deemed to require re-consideration by the Original Authority. The Tribunal directed a remand to the Original Authority for a proper classification of the services and subsequent decision on the demand. The appeals were allowed for this purpose, emphasizing the need for a thorough classification determination by the adjudicating authority.