2005 (11) TMI 16 - AT - Service Tax

Service Tax - Commissioner (Appeal) has no authority to issue fresh SCN u/s 73 in an appeal before him - Merely he can issue notice for enhancement of service tax, interest or penalty in terms of Sec 85 (4) - Case remanded

Summary

Issues:
1. Confirmation of demand under Section 70 of the Finance Act, 1994
2. Imposition of penalties under Sections 75, 75A, and 76 of the Act
3. Failure to collect and pay Service Tax under Section 68
4. Misinterpretation of show cause notice and order-in-original
5. Jurisdiction of the Commissioner (Appeals) to issue show cause notice under Section 73

Analysis:

Issue 1:
The appeal was against the order confirming a demand of Rs. 65,000 under Section 70 of the Finance Act, 1994. The Commissioner (Appeals) upheld the demand, imposed penalties of Rs. 500 under Section 75A, and Rs. 1,000 under Section 76. The order-in-original by the Assistant Commissioner deemed the appellant as a consulting engineering firm, necessitating the demand and penalties.

Issue 2:
Penalties were imposed under Sections 75, 75A, and 76 for failure to register, collect, and pay Service Tax in accordance with the provisions of Section 68. The appellant was alleged to have provided consulting engineering services without proper registration, leading to the penalties being imposed.

Issue 3:
The Assistant Commissioner found the appellant to be covered under the expression of 'consultant engineering firm' and non-cooperative in providing relevant documents. The services provided were deemed to fall under 'market research agency and management consultancy service', subject to Service Tax.

Issue 4:
The Commissioner (Appeals) issued a show cause notice to the appellant under Section 73 (1) of the Act, seeking recovery of Service Tax, interest, and penalties. However, the Commissioner misinterpreted the proviso to sub-section (4) of Section 85, leading to confusion regarding the nature of the notice issued and the authority to do so.

Issue 5:
The Commissioner (Appeals) erred in issuing a fresh show cause notice under Section 73 (1) instead of a notice for enhancing Service Tax, interest, or penalties under Section 85 (4). This misinterpretation led to a lack of proper consideration of the original show cause notice and the services provided by the appellant.

In conclusion, the impugned order was set aside, and the matter was remanded to the Commissioner (Appeals) for a proper determination of the Assistant Commissioner's order and the necessity of an enhancement notice under Section 85 (4). The appeal was allowed, emphasizing the need for correct interpretation and application of relevant legal provisions.