TMI Blog2015 (1) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... es. Notice should not suffer from obscurity and unintelligibility as to deny a fair and adequate chance to the recipient/assessee to get himself fully exonerated and avoid incidence of tax. What transpired after the notice was served, conduct of the parties thereafter, hearing given, are all factors that have to be examined to ascertain as to any prejudice was caused resulting in an arbitrary and unjust decision. Principle of prejudice resulting from vagueness and uncertainty has to be examined in pragmatic and a reasonable manner. No substantial question of law arises for consideration in the present appeal. It is not possible to agree with the said submission. As noticed above, substantial question of law was framed on 4th April, 2014. Tribunal in the impugned order has held that the show cause notices itself were vague and in violation of the principles of natural justice, and has set aside the order-in-original, which was passed. The show cause notices, averment made therein and principle of prejudice caused was not considered in proper legal perspective. Tribunal has not disposed of the appeal filed by the respondent-assessee on merits in respect of the findings given by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in brief are required to be noticed, as the Tribunal, in the impugned order, has not gone into the merits, but, has allowed the appeal of the assessee on the ground that the show cause notices dated 21-4-2010 and 20-4-2011 did not specify the sub-clause of Section 65(19) of the Finance Act, 2005 (Act, in short) and therefore, were bad in law. The Tribunal has not adjudicated and decided, whether or not the activities in question fell within the clauses (vi) and (vii) of Section 65(19) of the Act. Thus, whether clauses (vi) and (vii) of Section 65(19) of the Act could have been invoked and applied has not been commented upon and answered by the Tribunal. The Tribunal while reaching to the said conclusion, referred to the decisions in United Telecoms Ltd. v. CST, Hyderabad, 2011 (22) S.T.R. 571 (Tri-Bang.) and Kaur and Singh v. C.C.E., New Delhi, 1997 (94) E.L.T. 289 (S.C.) and Union of India v. M.L. Capoor and Others, AIR 1974 SC 87. It has been observed that the show cause notices were issued on the prima facie assumption that the activities were assessable as service tax as Business Auxiliary Services , but reasons for such assumption were not specified in the show cause notices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent-assessee were taxable as Business Auxiliary Services , under Section 65(19) read with Section 65(105)(zzb) of the Act. Therefore, by letter dated 17-12-2009, the assessee was asked to furnish month wise receipt of management fee on which service tax had not been paid. The assessee had furnished the said details amounting to ₹ 11,83,66,385/- for the period April, 2008 to March, 2009 on which service tax had not been paid. By letter dated 16-2-2010, the assessee also furnished figures for the period April, 2009 to December, 2009 amounting to ₹ 7,18,46,230/-. The show cause notice elucidated that on scrutiny of ST-3 returns for the period 2008-09, and April to September, 2009, the assessee had shown certain amount as exempted services under column 5AA(b). However, no details had been provided in the ST-3 returns. The amounts received were reproduced in the show cause notice. 8. In para 9 of the show cause notice dated 20-4-2011, provisions of the Finance Act as amended and the provisions of Service Tax Rules, 1994 as amended and applicable were stipulated. Thereafter, para 10 refers to, whether interest was chargeable and recoverable from the assessee. Para 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y them in various sub-paras. Criticising and referring to the notice, it was stated that the notice did not specify and satisfy anyone of the conditions provided in the definition of Section 65(19) and it was pleaded that the Commissioner has failed to specify the category under which the services provided by the assessee could be covered. However, reference was made to several decisions of the Tribunal, to claim the activities performed being complete independent business, would not fall in the category of Business Auxiliary Services. Reference was also made to Circular No. 59/8/2003-S.T., dated 20-6-2003 issued by the CBEC clarifying scope of levy under Business Auxiliary Services. In para 5 of the reply, it was stated by the respondent-assessee as under : Therefore, applying the ratio of the aforesaid decisions rendered by Hon ble CESTAT, and clarification provided by the CBEC the issue of non taxability of operating and managing hotels stands settled as the services provided by the Respondent to the Owner are in the nature of operating, controlling, administering, running and managing the hotel and are not in the nature of advice, consultancy, or technical assistance and ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eas their clients are themselves service providers. And were duty bound to provide services to their customers for a consideration. In other words they are providing services on behalf of their clients to their (client s) customers and hence are squarely covered under service tax under the taxable service category BAS. Accordingly, the reliance placed by the Noticees on the decisions of the Hon ble CESTAT is misplaced. The said decisions do not support the contention of the Noticees? 12. What is apparent from the order-in-original, is the fact that the Commissioner had drawn attention of the assessee to Section 65(19), which defines Business Auxiliary Services . In the show cause notice, it was pleaded that the services provided were covered under Business Auxiliary Services under Section 65(19) since it appeared to satisfy all definitional ingredients spelt out. The assessee had entered into agreements with service receivers namely M/s. Srinivasa Resorts Ltd., M/s. Laxmi Distributors P. Ltd., Adyar Gate Hotels owner of Park Sheraton Hotels and Grand Bay. It was stated that M/s. Srinivasa Resorts Ltd. and M/s. Laxmi Distributors P. Ltd., had agreed to make payment of service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de in the notice making reference to the agreements between the respondent-assessee and M/s Srinivasa Resorts Ltd., M/s Laxmi Distributors P. Ltd., Adyar Gate Hotels owner of Park Sheraton Hotels and Grand Bay would understand that reference was with regard to sub-clauses (vi) and (vii). The question was whether the activities performed and undertaken by the respondent-assessee under the agreement would fall in the category and within the meaning of Business Auxiliary Service. It was obvious that sub-clauses (i) to (iv) were not applicable. This leaves only sub-clause (v) and (vi). Sub-clause (vii) relates to service incidental or auxiliary to the activities specified in sub-clauses (i) to (vi). Read in the manner we do not think that it can be said that respondent-assessee was in dark or unaware as to what he had to answer and argue. Any ambiguity in such circumstances would have been removed at the time of oral hearing. Para 13 of the order of the Tribunal dated 24-7-2013 clearly indicates that the order is premised on the fact that the principles of natural justice were violated as the assessee did not have full opportunity to meet the case of the revenue for taxation of the ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he can meet them effectively and is not prejudiced by manifestly vague notice which leaves him confused and unable to answer/reply. The assessee must be given a reasonable and real opportunity and made aware as to what he has to meet. But, the notice cannot be read as a legislative enactment which is to the point, precise and required to show exceptional lucidity. What is required to be seen is whether the allegations made have been conveyed and set forth, to enable the recipient/assessee to get an opportunity to defend himself against the charges. Notice should not suffer from obscurity and unintelligibility as to deny a fair and adequate chance to the recipient/assessee to get himself fully exonerated and avoid incidence of tax. What transpired after the notice was served, conduct of the parties thereafter, hearing given, are all factors that have to be examined to ascertain as to any prejudice was caused resulting in an arbitrary and unjust decision. Principle of prejudice resulting from vagueness and uncertainty has to be examined in pragmatic and a reasonable manner. 18. At this stage, learned counsel for the respondent-assessee submits that no substantial question of law a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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