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2015 (11) TMI 680 - AT - Service TaxDemand of service tax - Demand confirmed under Business Support Services whereas demand was raised under BAS - order beyond the scope of show cause notice - Held that - The show cause notice specifically talks about the demands to be raised on the appellant under the category of Business Auxiliary Service which was contested by the appellant before the lower authorities. The adjudicating authority has also recorded the findings as the service would fall under the category of Business Auxiliary Services and in the appeal memorandum before the first appellate authority, the appellant herein contested the issue on that ground only. The first appellate authority has undoubtedly travelled beyond the allegations in the show cause notice and has confirmed the demands under Business Support Services which, in our view, is incorrect and unsustainable. In the peculiar circumstances, we find that the impugned order to the extend it confirms the demand raised on the commission received form M/s. JCB under Business Support Services is liable to be set aside - Decided in favour of assessee.
Issues involved: Determination of service tax liability on commission received from various sources including finance companies, M/s. JCB, and M/s. Auto Mart India Ltd. Challenge against the classification of services under 'Business Auxiliary Service' and 'Business Support Services'. Contention regarding the invocation of the extended period for tax demands. Assessment of penalties imposed under Section 78.
Analysis: 1. Service Tax Liability on Commission Received: The dispute revolved around the service tax liability on the commission received by the appellant from different entities. The revenue authorities argued that these activities fell under 'Business Auxiliary Service.' The appellant contested this classification, leading to a show cause notice. The adjudicating authority upheld the demands with interest and penalties. Upon appeal, the first appellate authority agreed with the appellant on certain points, such as non-taxability of the commission from M/s. Auto Mart India Ltd. However, the demands under 'Business Support Services' for commission from M/s. JCB were confirmed. The appellant challenged this liability specifically related to M/s. JCB. 2. Classification of Services and Invocation of Extended Period: The appellant's counsel argued that the first appellate authority wrongly reclassified the services under 'Business Support Services' instead of 'Business Auxiliary Service' as mentioned in the show cause notice. The appellant contended that this discrepancy was a ground for setting aside the order. Moreover, there was a dispute regarding the invocation of the extended period for tax demands related to commission received from M/s. JCB. The appellant maintained that this extended period was incorrectly applied. 3. Penalties Imposed: The appellant challenged the penalties imposed under Section 78, arguing that they were incorrect. The Departmental Representative reiterated the lower authorities' findings, leading to a detailed consideration of the submissions from both sides. The Tribunal found that the Revenue did not appeal against the dropped demands, and the first appellate authority's reasoning for confirming demands from financial institutions was deemed correct. The benefit of limitation was extended to the appellant, and the demands were confirmed within the limitation period. 4. Judgment and Decision: The Tribunal upheld the impugned order where not contested by the appellant but set aside the demands related to commission received from M/s. JCB under 'Business Support Services.' The Tribunal found that the first appellate authority exceeded the scope of the show cause notice by confirming demands under 'Business Support Services,' which was deemed incorrect and unsustainable. Therefore, the demands related to M/s. JCB under 'Business Support Services' were set aside, while other aspects of the order were upheld. This comprehensive analysis highlights the key issues, arguments, and the Tribunal's decision, providing a detailed overview of the legal judgment.
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