TMI Blog2010 (10) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... o the sub-clauses (i) to (vi) of section 65(19) to which maintenance of accounts related if the services fell under clause (vii) - Moreover, there were no such proposals in the show-cause notice - Find that no tax liability can be confirmed against any person unless the same is specifically alleged in the show-cause notice - Hence, hold that the impugned demand is not legally sustainable - Consequently, the demand of interest and penalty is also not sustainable. - ST/723 OF 2008 - 1312 OF 2010 - Dated:- 20-10-2010 - M.V. RAVINDRAN, P. KARTHIKEYAN, JJ. ORDER P. Karthikeyan, Technical Member - This is an appeal filed by M/s. United Telecom Ltd., (UTL) Hyderabad challenging the order of the Commissioner of Customs, Central Excise and Service Tax Hyderabad-II Commissionerate. Vide the impugned order, the Commissioner confirmed demand of an amount of Rs. 1,06,23,697 being the service tax found due from the appellant on services falling under Business Auxiliary Services rendered by it during the period 2003-04 to October 2007. The Commissioner demanded applicable interest on the above amount and imposed penalties under sections 76,77 and 78 of the Finance Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mits/Licences: MCH trade licenses, driving licenses, learning driving license, registration of Motor vehicles etc. The consideration as per the contract would be calculated and paid to UTL on the basis of transactions carried out. Transactions involved issue of driving license, birth/death certificate, payment of property tax, payment of telephone bills, issue of cinema tickets etc. In the show-cause notice issued, the authorities had tentatively found that UTL provided services to e-Seva. E-Seva ran cash counters at which the citizens paid utility bills, purchased bus and cinema tickets etc. Parties involved were departments of State Government and Central Government as well as private parties such as cinema theatres. UTL received service charges on a monthly basis from the Director e-Seva based on the number of transactions. These were tentatively held to be classifiable under Business Auxiliary Services by the authorities. 2.2 As per the show-cause notice, services involved were originally classified under the category Online information and database access or retrieval service and demand of service tax for the period April 2003 to November 2005 confirmed vide order- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that the department had not made any attempt to adduce any evidence that operating of e-Seva counters amounted to provisioning of taxable service in any manner. The subject activity was not classifiable under any of the taxable services envisaged under clause (105) of section 65 of the Act. After having failed to successfully adjudicate and recover the liability on the very same services, initiated under three show-cause notices, the impugned proceedings were in violation of principles of res judicata. The Committee of Commissioners had accepted the orders passed in the earlier proceedings. The impugned proceeding was therefore contrary to judicial discipline. The appellants cited several case laws in support of this plea. (ii) No new fact had emerged after the conclusion of earlier proceedings. The instant proceedings were on the same set of facts based on which the department had originally alleged that the subject services were classifiable under Online information and database access or retrieval services . The only change was that the period of demand had been extended from July 2003 - March 2007 to July 2003 - October 2007. In the absence of any new material, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same activity earlier, and lost the cases, Revenue could not allege that UTL had kept it in darkness and invoke extended period of limitation. Knowledge of facts and suppression of facts were antithetical. (viii) There was ambiguity faced by the department in interpreting the statutes. Therefore, there was no deliberate defiance of law or contumacious conduct on the part of the appellant. The demand of service tax and penalties imposed were therefore not sustainable. 5. During hearing learned counsel for the appellants submitted that the impugned order confirmed demand of service tax against the appellant without requisite proposal made in the show-cause notice. The show-cause notice did not indicate the precise and specific liability of the appellant in respect of activities it carried out during the material period in implementing e-Seva project. Show-cause notice being the foundation of levy of demand, the impugned demand was not sustainable as the same was ordered based on allegations that did not define clearly the liability of the appellant. The impugned demand and penalties were therefore not sustainable. We have also heard learned DR who reiterates the findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also argued that the show-cause notice did not mention the sub-clause to which the impugned activity was relatable if it fell under sub-clause (vii). The Commissioner had rejected these challenges on the reasoning that the show-cause notice had proposed to classify the impugned activities under Business Auxiliary Services under sub-clause (zzb) of section 65(105) which defined the taxable service as any service provided to a client by any person in relation to business auxiliary services . As the impugned services fell under the broad definition of business auxiliary services, not pointing out the relevant sub-clause of the six clauses of section 65(19) did not affect the demand. However, he observed that the entry stated at clause (iii) of the section 65(19) appeared to be the most appropriate. He also rejected the claim of the appellant that they were not liable to pay service tax on the consideration received as a commission agent since the statute did not require an assessee to be an agent (of a principal). As per the definition of commission agent , rendering of service on behalf of another person was sufficient for paying consideration as commission agent. The Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority. We also find that the activities engaged in by the appellants were intimated to the department on 20-12-2005. The show-cause notice basic to these proceedings was issued on 8-1-2008. The period of dispute is from July 2003 to October 2007. The plea of limitation raised by the appellant is valid and demand for most part of the period of dispute is time barred. The appellants have rightly relied on the judgment of the Apex Court in the case of Nizam Sugar Factory v. Collector of Central Excise 2006 (197) ELT 465 in this connection. 8.1 In the impugned order, the Commissioner suggests that the activity of the appellant could be classified variously under clause (iii) of section 65(19) as service rendered on behalf of a client, as of a commission agent or, under clause (vii), as maintenance of accounts. The Commissioner does not give a finding as to the sub-clauses (i) to (vi) of section 65(19) to which maintenance of accounts related if the services fell under clause (vii). Moreover, there were no such proposals in the show-cause notice. We find that no tax liability can be confirmed against any person unless the same is specifically alleged in the show-cause notice. We hol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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