2023 (5) TMI 607 - AT - Service Tax

Levy of Service Tax - training fee and other service charges received by the appellant in respect of BAS rendered by it for promoting the business of units, who were receiving the services - applicability of N/N. 13/2003-ST, dated 20.6.2003 - HELD THAT:- Principles of natural justice requires that a show cause notice must analyze the transactional documents in the light of the relevant statutory provisions and frame allegations against an assessee. Until and unless the show cause notice explains as to how the activity of an assessee falls within the scope of the relevant service tax provisions, allegations in the notice become futile. Mere bald allegations in a notice are not enough to sustain the demand against the appellant.

The impugned order has confirmed the demand of service tax on the income of Rs.64,21,843/- by observing that the contention of the appellant that it is covered under other litigation is factually incorrect. However, the impugned order has no finding as to how these charges are actually covered under the scope of BAS. A perusal of the nature of activities to which the said income pertains shows that they are service charges for the year 2004-05, received on account of Head Office, Bhopal; Emporium, Bhopal; Emporium, Jabalpur, Emporium, Rewa;Civil Department, Bhopal; Indore, Jabalpur and Gwalior. Further, bifurcation of the said income is between service charges received from Emporium division and service charges received by the civil department.

Reliance placed on the decision of the Supreme Court in COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT], where in it was held that composite contracts involving supply of goods coupled with provision of labour/services are covered under the scope of works contract services as defined in section 65(105)(zzzza) of the Finance Act, 1994 only with effect from 01.06 2007.

Thus, where the period of dispute is prior to the introduction of the statutory provision of works contract service, the impugned order cannot be upheld - appeal allowed.