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2018 (12) TMI 255 - AT - Service TaxValidity and scope of of SCN - Service Rendered to RBI - Cleaning Service - demand raised by invoking extended period of limitation - the examination of points raised in SCN not carried out - principles of natural justice - Held that - It is stated in the said SCN that the appellant were paying service tax in respect of Manpower and Recruitment and Supply Agency Service whereas it was also stated in the said show cause notice that the service rendered by appellant as Para Medical Services were nothing but Manpower Supply Services and appellant did not pay service tax - there is contradiction in the said show cause notice. Various agreements that must have been entered into by the appellant with the service recipient were not examined by Revenue. Further the invoices raised by the appellant were not examined by Revenue. It was essential to scrutinize the agreements and the invoices to come to a conclusion about exact nature of activity by the appellant so as to examine whether such activity was covered by definition of any service and whether any abatement from assessable value was available - without undertaking any examination of the activity rendered by the appellant, on the basis of income statement demand was raised. Since there was no scrutiny of the receipt by the appellant for issue of said SCN, the impugned SCN is not sustainable law - appeal allowed - decided in favor of appellant.
Issues:
1. Challenge against Order-in-Original regarding service tax demand for the period 2009-10 to 2012-13. 2. Grounds of appeal related to service rendered to RBI, taxability of cleaning services to SGPGI, and cleaning services to factory hospitals. Issue 1: Challenge against Order-in-Original regarding service tax demand for the period 2009-10 to 2012-13: The appeal was directed against Order-in-Original No. LKO/EXCUS/000/COM/ST/082/2015-16 dated 29.01.2016 passed by the Commissioner, Central Excise & Service Tax, Lucknow. The appellant, a service provider, received a show cause notice for a demand of service tax amounting to ?55,40,698 for the period from 2009-10 to 2012-13. The notice alleged discrepancies in the payment of service tax concerning various services provided by the appellant. The Original Authority confirmed the demand with interest and imposed an equal penalty, leading to the appellant's appeal before the Tribunal. Issue 2: Grounds of appeal related to service rendered to RBI, taxability of cleaning services to SGPGI, and cleaning services to factory hospitals: The appellant contested the demand on several grounds. Firstly, regarding services rendered to RBI, the appellant argued that services provided to RBI were exempt from service tax as per Notification number 22/2006. Secondly, concerning cleaning services to SGPGI, the appellant contended that SGPGI being a State University established by the State Government, the cleaning services provided were non-commercial and thus not liable for service tax. Lastly, the appellant claimed that cleaning services provided to hospitals of SAIL & RDSO, maintained in compliance with the Factories Act, were also non-commercial and fell under the exclusion category of taxable cleaning services. The Tribunal, after hearing both parties and examining the record, found discrepancies and contradictions in the show cause notice. It noted that the Revenue did not scrutinize the agreements and invoices related to the services provided by the appellant. The Tribunal emphasized the importance of examining the exact nature of the appellant's activities to determine tax liability accurately. Additionally, it highlighted that some services provided to RBI were exempted from service tax. The Tribunal concluded that the lack of scrutiny of receipts and agreements rendered the show cause notice unsustainable in law, leading to the proceedings being vitiated. Consequently, the impugned order was set aside, and the appeal was allowed. *(Pronounced in Court on 20.11.2018)*
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