2006 (11) TMI 16 - AT - Service Tax

Demand (Service tax )- Demand of service tax for prior period according to the provision which were deleted later After considering all facts decided in favour of assessee by adjudicating authority

Summary

Issues:
Appeal against Order-in-Original confirming Service Tax without invoking proviso of amended Section 73; Applicability of amended Section 73; Invocation of larger period for demands; Categorization of taxable services for taxation; Validity of confirmation of demands under different category than alleged in show cause notice.

Analysis:
The appeal stemmed from an Order-in-Original confirming Service Tax for a specific period without invoking the proviso of the amended Section 73. The appellant argued that since the show cause notice did not mention suppression of facts or fraud as required by the amended Section 73, the demands could not be confirmed for the period in question. The appellant contended that after the promulgation of the amended Section 73, the department should have invoked the larger period by stating the necessary elements, similar to Section 11A of the Central Excise Act.

The appellant referred to a Larger Bench judgment which emphasized that when provisions change, the existing provisions at the time of the notice should apply. In this case, the Department sought to recover amounts under a different category than initially alleged in the show cause notice. The Commissioner confirmed demands under a category not mentioned in the notice, leading to a challenge by the appellant. The appellant argued for setting aside the order based on these discrepancies.

The Commissioner defended the confirmation of demands, asserting that the notice issued under the previous provisions of Section 73 was valid, despite not invoking the proviso. However, upon careful consideration, the Tribunal disagreed with the Commissioner's contentions. The Tribunal held that the demands for the period before the promulgation of the new Section 73 should have been confirmed under the amended provisions. The Tribunal emphasized that once new provisions are in place, they should be complied with at the time of issuing the notice. Therefore, the demands were considered time-barred due to the failure to invoke the proviso to Section 73.

Furthermore, the Tribunal addressed the issue of categorization of taxable services for taxation. The Commissioner confirmed demands under a different category than alleged in the show cause notice, which was deemed improper. The Tribunal ruled that changing the category of demands without proper notice was unjustified. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.