2024 (4) TMI 909 - AT - Service Tax

Liability of appellant to pay service tax - vague SCN - SCN does not mention the category of service under which the demand has been proposed by the Department - HELD THAT - On perusal of the Show Cause Notice as well as the order passed by the Adjudicating Authority and the Commissioner (Appeals) it is not found as to what is the category of service alleged to be rendered by the appellant. Merely because the appellant received some amounts from M/s. Neyveli Lignite Corporation it cannot be said that they have rendered service. In the Show Cause Notice it is stated that the appellant rendered the activity of AMC of North Dump Yard Afforestation and watching and up keeping of community halls. It is not clear what is the category of these services. The Department has not stated whether the activity falls within the definition of a particular category of service. The Tribunal in similar set of facts had set aside the demand observing that when the category of service has not been mentioned in the Show Cause Notice the demand cannot be sustained. In NPS CONSTRUCTION VERSUS COMMISSIONER OF CGST CENTRAL EXCISE PONDICHERRY 2024 (4) TMI 532 - CESTAT CHENNAI the Tribunal followed the decision of the Hon ble Supreme Court in the case of COMMISSIONER OF C. EX. BANGALORE VERSUS BRINDAVAN BEVERAGES (P) LTD. 2007 (6) TMI 4 - SUPREME COURT wherein it was held that when the Show Cause Notice does not mention the specific category of service so as to inform the assessee about the allegations raised against them the demand cannot sustain. The impugned order is set aside - Appeal is allowed.

Summary

Issues involved:
The issue involved in this case is whether the appellant is liable to pay service tax as confirmed by the Adjudicating Authority.

Details of the judgment:

Issue 1: Lack of clarity on the category of service in Show Cause Notice
The appellant argued that the Show Cause Notice did not specify the category of service for which the demand was proposed, making it unclear whether the activity falls under Business Auxiliary Services, Security Services, or Maintenance and Repair Services. The Adjudicating Authority also did not state the category of service when confirming the demand, which was deemed crucial for the demand of service tax to be valid. The Tribunal had previously set aside a similar demand in a different case where the category of service was not mentioned in the Show Cause Notice. Citing a relevant case law, the appellant requested that the appeal be allowed based on this ground.

Issue 2: Lack of specificity in identifying the services rendered
Upon reviewing the Show Cause Notice and the orders passed by the Adjudicating Authority and the Commissioner (Appeals), it was noted that there was a lack of clarity regarding the specific category of service alleged to have been rendered by the appellant. Merely receiving payment from M/s. Neyveli Lignite Corporation was deemed insufficient to establish that services were provided. The Tribunal highlighted that without specifying the category of service in the Show Cause Notice, the demand for service tax could not be sustained, as per a previous decision and relevant case law. Therefore, the impugned order confirming the service tax liability was set aside, and the appeal was allowed with consequential reliefs, if any, as per the law.

Conclusion:
The Tribunal found that the lack of specificity in identifying the category of service in the Show Cause Notice rendered the demand for service tax unsustainable. As a result, the impugned order confirming the service tax liability was set aside, and the appeal was allowed in favor of the appellant.