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2014 (4) TMI 882 - HC - Service TaxDemand of service tax - recovery of service from third party - barely two days after the show cause notice, the department wrote two separate letters to M/s.Reliance Industries Limited and M/s.Essar Oil Limited, both service recipients from the petitioners calling upon them to make service tax payment - Held that:- The petitioners have raised several disputes including the dispute that some of the services having been provided in the special economic zone areas, service tax is not applicable. We are not judging the validity of such contentions. All that we are suggesting is that when the show cause notice was issued by the department to which the petitioners have raised their objections, recoveries without adjudication of such disputed taxes was simply not permissible in law. We notice that section 73C of the Finance Act 1994 allows the department to make provisional attachment of the properties of the assessee during the pendency of the proceedings under section 73 or 73A of the Act for the purpose of protecting the interest of the Revenue. Such provision cannot be activated for seeking recovery even before adjudication. Recovery of unpaid tax is to be made as per section 87 of the said Act which provides for the power and procedure for such recoveries - within two days of issuance of show cause notice, the respondents issued recovery orders against the customers of the petitioners, which in our opinion, was not simply permissible - However, assessee directed to make service tax payment - Decided partly in favour of assessee.
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