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TMI Blog2023 (6) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... Services without mentioning the specific clause, the demands cannot be legally sustained - reliance can be placed in COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, GOA VERSUS SHRI. SWAPNIL ASNODKAR [ 2018 (1) TMI 266 - CESTAT MUMBAI] and UNITED TELECOMS LTD. VERSUS COMMISSIONER OF SERVICE TAX, HYDERABAD [ 2010 (10) TMI 730 - CESTAT, BANGALORE] . Extended period of Limitation - HELD THAT:- It would also be relevant to note the decision of Hon ble Supreme Court in the case of COLLECTOR OF CENTRAL EXCISE VERSUS H.M.M. LIMITED [ 1995 (1) TMI 70 - SUPREME COURT] . In this case, the demand was made by invoking the proviso to Section 11A(1) of Central Excise Act 1944 by demanding the Excise Duty for the extended period - From the above judgment, it gets clarified that even when extended period is invoked in terms of Section 11A(1), the Department should clearly specify as to under which of the sub-clause the Show Cause Notice is being issued. The ratio of this case law to clarify that whenever any allegation is made, the same is required to be made with specific sub-clause of main clause. Without going into further merits of the arguments on various counts, on the sole ground that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce tax towards import of services, the demand of Rs. 12,40,303/- was raised. After due process the Adjudicating Authority confirmed the demands. Aggrieved by the impugned Order-in-Original the Appellant is before the Tribunal. 2. As per the Appellant the demand of Rs. 1,15,79,699/- can be bifurcated into demand towards services provided by them as (i) data clearing services Rs. 1,06,74,048/- (ii) management services forming part of information technology services Rs. 9,05,651/-. The Learned Counsel appearing on behalf of the Appellant submits that in respect of financial settlement services they are not disputing the issue and have paid the service tax of Rs. 9,05,651/- along with interest of Rs. 4,35,830/- which have been appropriated in the Order-in-Original. They only pray for setting aside of the penalty on this amount. 3. In respect of Business Auxiliary Services wherein the service tax of Rs. 1,06,74,048/- has been confirmed, he takes the preliminary objection that the Show Cause Notice was issued alleging that the Appellant is rendering the service of Business Auxiliary Services falling under Section 65(19). This Section 65(19) has the following clauses wherein differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the client. In their case as per the Agreements entered in with all the clients, there are only two parties i.e. Appellant and the client and there is no question of any third party being part of this scheme. Therefore, even on this count their services cannot fall under Business Auxiliary Services and hence the confirmed demands are liable to be set aside on merits. 5. He cites the case laws of Balaji Enterprises Vs CCE ST, Jaipur [2020 (33) GSTL 97 (Tri-Del)] wherein Delhi Bench has categorically held that when the Show Cause Notice fails to indicate the specific sub-clause of Section 65(19), the confirmed demands are liable to be set aside on the score itself. He also relies on the case law of CCE, Goa Vs Swapnil Asnodkar [2018 (10) GSTL 479 (Tri-Mum)] wherein the issue pertain to Business Auxiliary Services. Further, he relies on the case law of United Telecom Ltd., Vs CST, Hyderabad [2011 (22) STR 571 (Tri-Ban)] wherein also it was held that if not allegation is made regarding non-payment of Service Tax on account of Business Auxiliary Services being provided, the Show Cause Notice must clearly indicate the sub-clause under which the service rendered falls. 6. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents. 11. Coming to the very first preliminary objection raised by the Appellant that the Show Cause Notice has failed to correctly specify the clause under which the Appellant services will fall, on perusal of the Show Cause Notice it is seen that the entire portion of Section 65(19) pertaining to Business Auxiliary Services has been extracted at Para 2 of the Show Cause Notice without any reference whatsoever as to under which clause of the Section 65(19) the services referred by the Appellant would fall. On this issue it is seen that Tribunals have been consistently holding that it is essential for the Show Cause Notice issuing authority to clearly indicate the sub-clause under which the service tax in question would fall. 12. In the case of CCE, Goa Vs Swapnil Asnodkar [2018 (10) GSTL 479 (Tri-Mum)] the Tribunal has held as under: 4. We have carefully considered the submission made by both sides. We find that though in the SCN the respondent was made liable to pay service tax but as rightly held by the adjudicating authority, no specific clause of Section 65(19) defining Business Auxiliary service has been shown to be applicable to levy service tax. It is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self not sufficient to invalidate the exercise of that power. 29. The impugned order, therefore, can be set aside only on this ground as the show cause notice does not mention which service out of the seven services specified in Section 65(19) of the Act was undertaken by the Appellant.[emphasis supplied] 13. From the above decisions, it can be seen that the Tribunals have been consistently holding that the Show Cause Notice should clearly indicate the sub-clause of Section 65(19) under which the alleged services rendered. If the demand is made merely stating that the services rendered falls under Business Auxiliary Services without mentioning the specific clause, the demands cannot be legally sustained. 14. It would also be relevant to note the decision of Hon ble Supreme Court in the case of Collector of Central Excise Vs HMM Ltd., [1995 (76) ELT (SC)]. In this case, the demand was made by invoking the proviso to Section 11A(1) of Central Excise Act 1944 by demanding the Excise Duty for the extended period. The Hon ble Supreme Court after considering the submissions from both sides held as under: 2. If the Department proposes to invoke the proviso to Section 11A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring Agent liable for levy of the service tax. That question has been decided by the Supreme Court by its judgment in the case of Laghu Udyog Bharati (supra) and the Supreme Court has clearly laid down that the imposition of the service tax is on the persons rendering the services and by making a provision in the Rules, levy of tax cannot be shifted to the recipients of the services and the Rule framed which brought about this situation has been declared by the Supreme Court to be invalid. The law laid down by the Supreme Court in its judgment in Laghu Udyog (supra) is squarely applicable to Rule 2(1)(d)(iv), which is relied on in this case. It appears that it is first time when the Act was amended and Section 66A was inserted by Finance Act, 2006 w.e.f. 18-4-2006, the Respondents got legal authority to levy service tax on the recipients of the taxable service. Now, because of the enactment of Section 66A, a person who is resident in India or business in India becomes liable to be levied service tax when he receives service outside India from a person who is non-resident or is from outside India. Before enactment of Section 66A it is apparent that there was no authority vested by l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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