Impugned order unsustainable due to vague, non-specific, and ...

Flawed order due to vague notice alleging dual taxability impermissibly. No independent design services. Revenue failed to prove design as aim.

Case Laws     Service Tax

August 7, 2024

Impugned order unsustainable due to vague, non-specific, and invalid show cause notice (SCN). SCN alleged taxability under two categories - Design Services and Commercial and Industrial Construction Services - simultaneously, which is impermissible. No independent design or drawing services provided by foreign entity; consideration paid for gamut of indivisible services integral to contract. Revenue failed to establish design and drawings as independent contractual aim, and attempt to artificially segregate supply cannot be sustained. Observations and findings in impugned order went beyond scope of SCN, which did not allege classification under Design Services. Demand of service tax under reverse charge mechanism for Design Services cannot be upheld. Appeal allowed by Appellate Tribunal.

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