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TMI Blog2024 (3) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... ar idea of the exact nature of the services provided. However, once all the information was provided in the reply to the SCN including the contracts which the appellant had entered into with its clients, it was incumbent on the Commissioner to classify the services appropriately and confirm service tax. In the process, the Commissioner might have found that service tax is not chargeable or chargeable for rendering security agency service (invoked in the SCN) or for rendering some other taxable service which the appellant may have rendered. However, there is no justification for the Commissioner to confirm a demand without specifying any head. This vagueness in the impugned order makes it impossible for the appellant to defend itself against the confirmed demand - this part of the demand cannot be sustained and needs to be set aside. Issuance of second SCN - Demand on account of the credit notes issued by the appellant which, the Commissioner considered as the amounts received by the appellant towards providing taxable services and hence confirmed the demand of service tax - HELD THAT:- In this case, the appellant was the service provider and was liable to pay service tax on any amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order, the operative part of which is as follows: FOR SCN No. 1 (i) I confirm the demand of service tax of Rs. 31,89,537/- (Rs. Thirty one lakhs, eighty nine thousands five hundred thirty seven only) and order to recover the same from M/s Insight India Pvt. Ltd. I order to drop the rest of demand of Rs. 2,18,09,355/- (Rs. Two crores, eighteen lakhs, nine thousand, three hundred and fifty five only) against the total amount of Rs. 2,49,98,892/- as raised in the Show Cause Notice (including E. Cess SHE Cess) against M/s Insight India Pvt. Ltd. under sub-section (1) of Section 73, read with Sections 66/66B 68 of the said Act. (ii) I also confirm the demand of interest and order to recover the same from the M/s Insight India Pvt. Ltd. under Section 75 of the act from the due date till the date of actual deposit of the said amount as proposed at Sl. No. (i) on the above confirmed demand. (iii) I impose penalty of Rs. 10,000/- (Rupees ten thousand only), under Section 77 of the Finance Act, 1994 for the contraventions of Sections 66, 67, 68 and 70 of the Act read with Rules 6 and 7 of the Service Tax Rules, 1994 (iv) I impose penalty of Rs. 31,89,537/- (Rs. Thirty one lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t best judgment assessment and determined service tax liability based on actual figures provided by the appellant. Consequently, of the demand of Rs. 2,49,98,892/- proposed in the SCN, she confirmed only Rs. 31,89,537/- and dropped the rest of the demand. She confirmed the demand made in the second SCN dated 13.4.2015. She also held that interest was payable on these demands under section 75 and imposed penalties under sections 77and 78 of the Finance Act. 4. We have heard learned consultant for the appellant and learned authorised representative for the Revenue and perused the records. First SCN dated 21.10.2014 5. Learned consultant submits that of the Rs.31,89,717/- confirmed by the Commissioner, a sum of Rs. 85,202/- was paid even before the SCN was served but this was not accepted by the Commissioner in the order-in-original. Further, he submits that a sum of Rs. 1,72,463/- was paid after the SCN was issued but before the order was passed. He asserts that a sum of Rs. 34,670/- was wrongly confirmed by the Commissioner because the services were rendered to the Mauritius High Commission and hence were exempted from service tax. He further submits that a sum of Rs. 42,336/- was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete information which was available. In reply, the appellant produced its records and the Commissioner has, correctly, considered them and dropped a substantial part of the demand and confirmed only a smaller amount as demand of Rs. 31,89,717 as service tax. 11. Learned consultant for the appellant submits that in the impugned order, the Commissioner had not considered some amounts which were paid before and after the issue of SCN, and confirmed demand on the amounts received for sale of goods. She has also charged service tax on the services rendered to the Mauritius High Commission which is exempted and also has incorrectly, held that the cleaning services which the appellant had rendered were manpower supply services and confirmed the demand. The details are as follows: Particulars Tax demand (Rs.) A Total demand confirmed 31,89,717 B Service tax paid before the service of SCN but not considered in the OIO 85,202 C Service tax on amount received for sale of goods 42,336 D Service tax paid after the issue of SCN but before issue of OIO E Services rendered to the Mauritius High Commission 34,670 F Remaining demand on cleaning service/ manpower service 28,55,046 12. We find th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or manpower supply services. This part of the demand, therefore, according to the learned consultant, needs to be set aside on the grounds of vagueness. 16. The relevant portion of the impugned order is reproduced below: 15.3 I am of the view that to specify any service in any particular category, the Agreement executed for the service between the service provider and recipient is the most efficient, essential and specific document. Noticee has submitted some of the agreements executed with their clients for Cleaning Activity Service . Following facts have been observed from the agreements : (i) Language of these agreements are nearly same. It has been mentioned in the agreements that the Noticee will provide workers/personnel/employees which shall be further assigned job/work by their clients. The jobs are in relation to sanitation, cleaning, maintenance services like lift operators, plumbers, helpers etc. Thus, the Noticee is not involved directly in cleaning activity; rather they are providing manpower for the activities which includes cleaning also. Thus, the nature of services executed by the Noticee can still not be categorized under Cleaning Activity Service . (ii) The clien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fourteen) copies of Agreements. The overall summary of each of the agreement with taxability remarks is as given below : S. No. Agreement Date Name of Client Purpose Shown by Noticee Remarks for taxability 1. 07-05-10 M/s Arglo Sanskrit Victoria Jubilee Sr. Sec School Security Service Taxable before negative list. 2. 16-04-10 M/s Asian Paints Ltd. Security Service Taxable being commercial and covers under definition of Security service 3. 31-01-13 M/s Asian Paints Ltd. Security Service Taxable being commercial and covers under definition of Security service 4. 14-06-07 M/s Superior Films Pvt. Ltd. Security Service Taxable being commercial and covers under definition of Security service 5. 01-04-10 M/s Ruchi soya Industries Ltd. Cleaning service Taxable being covered under commercial definition of cleaning service, moreover, the agreement shows that the Noticee has provided manpower and machinery for doing house keeping jobs which includes cleaning activity. Agreement is without any stamp fees paper. Cleaning service Taxable being covered under commercial definition of cleaning service, moreover, the agreement shows that the Noticee has provided manpower and machinery for doing hous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was called for, it had not supplied the complete information sought by the department. Hence, a notice was issued invoking section 72 (Best Judgment assessment). Therefore, at that stage, the Commissioner may not have had a clear idea of the exact nature of the services provided. However, once all the information was provided in the reply to the SCN including the contracts which the appellant had entered into with its clients, it was incumbent on the Commissioner to classify the services appropriately and confirm service tax. In the process, the Commissioner might have found that service tax is not chargeable or chargeable for rendering security agency service (invoked in the SCN) or for rendering some other taxable service which the appellant may have rendered. 19. However, there is no justification for the Commissioner to confirm a demand without specifying any head. This vagueness in the impugned order makes it impossible for the appellant to defend itself against the confirmed demand. We are also unable to fathom the mind of the learned Commissioner and decipher the impugned order to understand under which head the demand was confirmed. We, therefore, find that this part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant had paid and therefore, service tax cannot be charged from the appellant on the amount which it had paid to other parties. Learned counsel for the appellant submits that some of the clients of the appellant had cancelled their orders and hence it had returned the amounts paid by them by issuing credit notes. Since this is a simple case of alleged wrong calculation, we find that this is a fit case to be remanded to the Commissioner to consider the credit notes and redetermine service tax, if any, is payable for the period covered by this SCN. 23. The appeal is partly allowed, partly rejected and partly remanded as below: First SCN a) The demand of service tax on the security agency service rendered to the Mauritius High Commission by the appellant is upheld. b) The demand of service tax of Rs. 28,55,046/- confirmed in the impugned order is set aside for vagueness as no taxable service was indicated. c) The issues pertaining to the rest of the demand in this SCN are remanded to the Commissioner for verification if the amounts were paid by the appellant as service tax before issue of SCN or after issue of SCN but before the issue of the impugned order and if some amounts were re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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