2015 (6) TMI 824 - AT - Service Tax

Demand of service tax - Construction services vs Repair and maintenance service - Whether department can be travel beyond the show cause notice - Held that - We find that the initially the show cause notice was issued to the appellant to demand service tax under the category of construction services which was demanded and demand of service tax was confirmed under the said category against the appellant which appellant has not disputed. Under section 84 of the Act, learned Commissioner revised the show cause notice to change the category of the service provided by the appellant which is not permissible at this stage. Same view has been held by this Tribunal in the case of Brij Mohan Surinder Kumar 2011 (6) TMI 566 - CESTAT, NEW DELHI . We hold that learned Commissioner has travelled beyond the scope of show cause notice by revising show cause notice which is not permissible in law. Same view has been taken by Apex Court in the case of CC, Mumbai vs. Toyo Engineering India Ltd. 2006 (8) TMI 184 - SUPREME COURT OF INDIA . - Decided in favour of assessee.

Summary

Issues:
Appeal against demand of service tax under repair and maintenance service category; Revision of show cause notice under section 84 of Finance Act, 1994; Permissibility of changing service classification at a later stage; Validity of allowing abatement; Jurisdiction of Commissioner to revise show cause notice.

Analysis:
The appellant contested the demand of service tax under repair and maintenance service category after initially being demanded under construction services. The adjudicating authority allowed 67% abatement to the appellant for construction services. However, a revised notice was issued under section 84 of the Finance Act, 1994, claiming an error in allowing abatement as the appellant was engaged in repair and maintenance services. The Commissioner revised the classification to repair and maintenance, leading to the appeal.

The appellant argued that changing the service classification at a later stage was impermissible, citing precedents like Brij Mohan Surinder Kumar vs. CCE, Ludhiana and CC Mumbai vs. Toyo Engineering India Ltd. The appellant contended that the revision of the show cause notice was beyond the scope of the law. Conversely, the respondent argued that the adjudication error in allowing abatement justified the reclassification, asserting the Commissioner's authority under section 84.

Upon hearing both parties, the Tribunal found that the Commissioner exceeded the scope of the show cause notice by revising the classification, which was not permissible under the law. Citing the case law, the Tribunal emphasized that the Department cannot go beyond the issues raised in the show cause notice. Consequently, the impugned order was set aside as the Commissioner had overstepped the bounds of the original issue. The appeal was allowed with any consequential relief.

In conclusion, the judgment centered on the permissibility of changing service classification post-adjudication, highlighting the importance of adhering to the scope of show cause notices and the limitations on revising such notices under section 84 of the Finance Act, 1994.