2016 (8) TMI 676 - AT - Service Tax

Scope of show cause notice - demand was raised under the category of BAS - demand was confirmed under the different category - Held that - Admittedly, the show cause notice proposed demand of duty under Business Auxiliary service and it is only during adjudication by considering the appellants stand that the demand may fall under the category of Information technology Software Services stand confirmed. As per declaration of law in the above decisions, allegations are required to be made by the Revenue very clearly in the show cause notice and adoption of classification of service under the heading different than the one proposed in the show cause notice amounts to passing the order beyond the scope of show cause notice which is not permissible and the impugned order is required to be quashed on the said ground itself. Demand set aside in toto - Decided in favor of assessee.

Summary

Issues:
1. Confirmation of service tax demand under different categories - Business Auxiliary Service, manpower recruitment or supply agency, and information technology software services.
2. Applicability of Export of Service Rules, 2005 on demand under Business Auxiliary Service.
3. Validity of demand under the category of manpower recruitment or supply agency.
4. Alleged discrepancy in the demand under information technology software services and its classification.

Analysis:
1. The appeal challenged a service tax demand confirmed by the Commissioner, Central Excise, New Delhi, totaling &8377; 5,52,11,917/- and &8377; 5,10,826/- along with interest and penalties under Sections 75 and 78. The demand was categorized under Business Auxiliary Service, manpower recruitment or supply agency, and information technology software services.

2. The Tribunal found that the appellant unsuccessfully claimed benefit under Export of Service Rules, 2005 for the demand under Business Auxiliary Service. However, the issue was no longer res integra and had been previously decided by the Tribunal in various cases. Following the precedent, the demand under this category was set aside.

3. Regarding the demand under the category of manpower recruitment or supply agency, the Tribunal referred to previous decisions to establish that the demand confirmation was not sustainable. By following established precedents, the Tribunal held that the demand under this category was also set aside.

4. The demand under information technology software services was challenged on the grounds that the adjudicating authority confirmed the demand under a different category than initially proposed in the show cause notice. Citing legal principles from previous cases, the Tribunal ruled that passing an order beyond the scope of the show cause notice was impermissible. Consequently, the impugned order was quashed based on this ground.

5. Ultimately, the Tribunal set aside the entire impugned order and allowed the appeal of the appellant with consequential relief, pronouncing the decision on 27/7/2016.