2018 (12) TMI 1181 - AT - Service Tax

Validity of SCN - case of appellant is that the category of services are not clear from the show cause notice or the impugned order, which has confirmed the demand - Held that - The department has not mentioned the category / classification of the service under which the demand is made. Various allegations have been raised in the SCN. However, the classification of the service upon which the specific demand of service tax has been made is not forthcoming. Even after receiving the reply of the appellant, the adjudicating authority has not been able to confirm the demand under a particular category. The department has not considered the exemption eligible for agricultural produce and has raised the demand without mentioning the category of service. It is not understood whether the demand is on storage or warehousing services or under GTA service - There is a fundamental flaw in the show cause notice as well as in the impugned order. The demand cannot sustain and requires to be set aside - appeal allowed - decided in favor of appellant.

Summary

Issues: Alleged incorrect service tax payment, demand of service tax, interest, and penalties, classification of services for tax purposes

In this case, the appellants were engaged in providing various services including storage and warehousing, cleaning services, business auxiliary services, and GTA services. During an audit, discrepancies were found between the ST-3 returns and income tax returns, leading to a show cause notice for demand of service tax, interest, and penalties. The original authority confirmed a demand of &8377; 84,25,916/- along with interest and penalties. The appellants contended that the show cause notice did not specify the category of service for the demand and that certain services provided, such as storing agricultural produce and fumigation, were exempted. They argued that the original authority did not consider all relevant aspects and did not clarify the classification of services. The Tribunal noted that the show cause notice and impugned order did not specify the category of service for the demand, leading to confusion regarding the basis of the demand. As a result, the Tribunal held that the demand could not be sustained and set aside the impugned order, allowing the appeal with consequential relief. The miscellaneous application filed by Revenue for a change of cause title was allowed.