2023 (1) TMI 740 - AT - Service Tax

Validity of SCN - Classification of services - erection, commissioning or installation service or works contract service or commercial or industrial construction service - HELD THAT - In M/S. SHUBHAM ELECTRICALS VERSUS CST ST, ROHTAK 2015 (6) TMI 786 - CESTAT NEW DELHI , a Division Bench of the Tribunal examined a similar controversy since the show cause notice also alleged that the services provided could either be classified under management, maintenance or repair service or erection, commissioning or installation service and set aside the impugned order for the reason that the show cause notice was vague and incoherent. The show cause notice issued by the Department in the present appeal is also vague and incoherent as it alleges that the appellant could have provided any of the three alternative services. Impugned order set aside - appeal allowed.

Summary

Issues:
1. Appeal against the order confirming demand of service tax with interest and penalty.
2. Allegations of alternative services provided by the appellant.
3. Classification of services under 'erection, commissioning or installation service', 'works contract service', and 'commercial or industrial construction service'.
4. Vagueness and incoherence in the show cause notice.
5. Legal implications of the judgments in M/s Shubham Electricals and Commissioner of Service Tax v. ITC Ltd.

Analysis:

1. The appeal challenged the order confirming the demand of service tax with interest and penalty. The appellant contended that the show cause notice was vague, alleging alternative services provided, similar to the case in M/s Shubham Electricals.

2. The appellant's representative argued that the order passed by the Commissioner should be set aside due to the vague nature of the show cause notice, which alleged alternative services provided by the appellant. The Division Bench in M/s Shubham Electricals set aside a similar order due to the vagueness of the show cause notice.

3. The show cause notice issued to the appellant mentioned that the services provided could fall under 'erection, commissioning or installation service', 'works contract service', or 'commercial or industrial construction service'. The Commissioner's order also classified the services under these categories, indicating a lack of specificity.

4. The Division Bench in M/s Shubham Electricals and the Delhi High Court in a related case both emphasized the importance of clarity in show cause notices and adjudication orders. The show cause notice in the present case was deemed vague and incoherent, similar to the situation in M/s Shubham Electricals, leading to the order being set aside.

5. The judgment cited legal precedents to support setting aside the order due to the vague nature of the show cause notice. The Delhi High Court concurred with the Tribunal's decision, highlighting the importance of clarity in determining the taxable service performed by the appellant. The Department's challenge was dismissed, reinforcing the need for specificity in show cause notices and adjudication orders to avoid vagueness and ensure legal sustainability.