2020 (6) TMI 554 - Service Tax

Head Note / Extract:
Validity of SCN - Intellectual property service - appellant had incurred various expenses which were recorded in their accounts as “Foreign Expenses (Miscellaneous Foreign Expenses)” - period 2006-07 to 2007-08 - Case of appellant is that the SCN is so vague that it does not even specify the taxable service for which these demands were made - HELD THAT:- The appellant has not been put to notice alleging that they have either rendered a taxable service which made them liable to pay service tax or have received any taxable service from overseas service provider, which rendered them liable to service tax under the reverse charge mechanism. As the show cause notice is very vague and wants to charge service tax only on the ground that the appellant had made some payments to their overseas counterparts, the impugned order needs to be set aside. If the allegations in the show cause notice are true, the department could have undertaken more serious investigations using all the powers available to the officers under the law including taking legal action against anyone dishonouring the summons. However, this cannot be a ground to issue a show cause notice without clarifying under what head the tax has to be paid and for which taxable services received by the appellant. The impugned order confirming demands made in such a nebulous show cause notice is bad in law and cannot sustain and needs to be set aside. Appeal allowed - decided in favor of appellant.