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2014 (7) TMI 493 - AT - Service TaxDemand of service tax beyond the scope of Show cause notice - Business support service - Cleaning services of toilets and coaches in trains - Held that - The show cause notice had been issued on the basis that the activity of the appellant - cleaning of coaches and toilets of certain trains and supply of bed rolls to the passengers of ACs coaches is the support service of business or commerce covered by Section 65 (105) (zzzq) readwith Section 65 (104c) of the Finance Act, 1994. There is no allegation in the show cause notice that in the alternative the Appellant s services may be taxable as business auxiliary service under Section 65 (105) (zzb) readwith Section 65 (19) (vi). The Commissioner (Appeals) in the impugned order after giving a finding that the Appellant s activity is not support service of business or commerce has gone on to examine the taxability of their activity as business auxiliary service under Section 65 (105) (zzb) readwith Section 65 (19) and in doing so, he has traveled beyond the scope of show cause notice which is not permissible in view of the judgment of the Apex court in the cases of CCE, Nagpur vs. Ballaspur Industries Ltd. reported in (2007 (8) TMI 10 - SUPREME COURT OF INDIA ) and CCE, Bangalore vs. Brindavan Beverages (P) Ltd. reported in 2007 (2007 (6) TMI 4 - SUPREME COURT OF INDIA). In view of this, the impugned order is not sustainable - Decided in favour of assessee.
Issues:
1. Whether the appellant's activity of supplying food, bed rolls, and cleaning services to train passengers is taxable under the Finance Act, 1994. 2. Whether the appellant should be liable to pay service tax on the amount received from Indian Railways Catering and Tourism Corporation Ltd. (IRCTC). 3. Whether the appellant's services fall under the category of 'support service of business or commerce' or 'business auxiliary service' as per the relevant sections of the Finance Act, 1994. Issue 1: Taxability of Appellant's Activity The appellant specialized in supplying food to train passengers, providing bed rolls, and cleaning coaches and toilets. The dispute arose regarding the period from May 2007 to 31/12/2008 when the Indian Railways Catering and Tourism Corporation Ltd. (IRCTC) awarded the appellant a license for these services. The Department contended that the appellant's services are taxable under Section 65 (zzzq) read with Section 65 (104c) of the Finance Act, 1994. A show cause notice was issued demanding service tax from the appellant. The Additional Commissioner confirmed the demand, imposing penalties. The Commissioner (Appeals) upheld this decision, leading to the current appeal. Issue 2: Liability to Pay Service Tax The appellant received remuneration from IRCTC for providing services to train passengers. The Department argued that the appellant should pay service tax on the amount received. The appellant's counsel contended that the services provided were not in the nature of support service of business or commerce. The Department imposed penalties under Sections 76, 77, and 78 of the Finance Act, 1994. The Commissioner (Appeals) dismissed the appeal, leading to the current appeal before the Tribunal. Issue 3: Classification of Services The show cause notice alleged that the appellant's services were 'support service of business or commerce' under Section 65 (105) (zzzq) read with Section 65 (104c). However, the Commissioner (Appeals) classified the services as 'business auxiliary service' under Section 65 (105) (zzb) read with Section 65 (19). The Tribunal noted that the Commissioner (Appeals) exceeded the scope of the show cause notice by reclassifying the services. Citing relevant judgments, the Tribunal held that the impugned order was unsustainable and set it aside, allowing the appeal. This detailed analysis of the judgment highlights the issues surrounding the taxability of the appellant's services, their liability to pay service tax, and the correct classification of their services under the Finance Act, 1994. The Tribunal's decision to set aside the impugned order showcases the importance of adhering to the scope of show cause notices in tax matters.
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