TMI Blog2019 (8) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... the allegations. The Madras High Court in THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S INDIAN OIL CORPORATION, CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL [ 2017 (6) TMI 573 - MADRAS HIGH COURT] also observed that the Show Cause Notice has to give material particulars since it is the very basis and foundation for the proceedings initiated by the department. Appeal allowed - decided in favor of appellant. - Service Tax Appeal No.1175 of 2011 - FINAL ORDER NO. 71424/2019 - Dated:- 16-7-2019 - MR. JUSTICE DILIP GUPTA, PRESIDENT And MR. ANIL G. SHAKKARWAR, MEMBER (TECHNICAL) Shri B.L. Narasimhan (Advocate) And Shri Ayush Agarwal (Advocate) for the Appellant Shri Shiv Pratap Singh, Authorised Representative for the Respondent ORDER JUSTICE DILIP GUPTA This appeal seeks to assail the order dated 13 April 2011 passed by the Commissioner(Appeals), by which the appeal filed by the appellant to assail the order dated 27 May 2010 passed by the adjudicating authority has been dismissed. 2. A Show Cause Notice dated 25 May 2009 was issued to the Appellant. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod 2005-06 paid ₹ 19,77,501/- and during the period 2006-07, paid an amount of ₹ 20,88,955/- against Technical Know How to foreign concern and the aforesaid amount was paid in foreign currency. As per the provisions of Service Tax Rules, 1994, if service is being received from foreign concern, the tax liability would devolve on service recipient. Such Technical Know how received from foreign concern falls under the category of Business Auxiliary Service and service recipient is liable to pay Service Tax as detailed below:- Financial Year Amount Received Rate Service Tax Ed. Cess @ 2% 2005-06 ₹ 1977501 10% ₹ 197750 ₹ 3995 2006-07 ₹ 2088955 12% ₹ 250675 ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount Received Rate Service Tax Ed. Cess @ 2% SH.Ed. Cess @ 1% 2004-05 ₹ 1238894 10% ₹ 123889 ₹ 2478 - 2005-06 ₹ 4084525 10% ₹ 408453 ₹ 8169 - 2006-07 ₹ 8421574 12% ₹ 1010589 ₹ 20212 - 2007-08 ₹ 14192211 12% ₹ 1703065 ₹ 34061 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The Show Cause Notice further mentions despite being called upon to deposit the aforesaid amount of Service Tax, the appellant did not deposit the same and also failed to register itself under BAS. The Show Cause Notice, therefore, further mentions :- Therefore, the foregoing facts go to suggest that M/s Micromatic Grinding Technologies Ltd., Meerut Road, Ghaziabad wilfully suppressed the vital information with regard to the services rendered under the category of Business Auxiliary Service from the department. They, thus, appear to have contravened the provisions of sections 66-A,67, 68, 69 and 70 of the Finance Act 1994 read with Rules 4, 6 7 of the Service Rules 1994 and, as such, rendered themselves liable to penal action under Sections 76 read with Section 78 of the Finance Act, 1994 . The party wilfully suppressed the facts from the department with intent to evade payment of Service Tax hence the provisions of Section 73 of the Finance Act, 1994 are invokable in this case. 4. A detailed reply was filed by the appellant to the aforesaid Show Cause Notice. Apart from making submissions on merit, the appellant also contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri B.L. Narasimhan, learned Counsel for the appellant placed the Show Cause Notice and the reply given by the appellant to the Show Cause Notice and submitted that the notice deserves to be set aside for the reason that it is vague and does not disclose at all the sub-clauses of section 65(19) under which the alleged BAS services provided by the appellant were liable to Service Tax. It is his contention that it was obligatory for the Revenue to have specifically indicated in the Show Cause Notice why the activities undertaken by the appellant were covered under a particular clause of the definition of BAS. In support of his contention, learned Counsel placed reliance upon the aforesaid decisions and also Commissioner of C.Ex., Bangalore v. Brindavan Beverages Private Limited reported in 2007 (213) E.L.T. 487 (S.C.) and Commissioner of Central Excise, Chennai-I v. Indian Oil Corporation reported in 2017 (354) ELT 585(Madras). 7. Learned Authorized Representative of the department, however, submitted that there is no vagueness in the Show Cause Notice and the appellant did file a reply to the various allegations contained in the Show Cause Notice. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for, or on behalf of, the client; (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, and includes services as a commission agent, but does not include any information technology service and any activity that amounts to manufacture within the meaning of clause (f) of section 2 of the Central Excise Act, 1944 (1 of 1994). Explanation. For the removal of doubts, it is hereby declared that for the purposes of this clause, - (a) commission agent means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person, who, while acting on behalf of the another person - (i) deals with goods or services or documents of title to such goods or serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the behest or with the connivance of the respondents. Independent arrangements were entered into by the respondents with the franchise holder. On a perusal of the show cause notice the stand of the respondents clearly gets established. 10. There is no allegation of the respondents being parties to any arrangement. In any event, no material in that regard was placed on record. The show cause notice are not specific and are on the contrary vague, lack details and/or unintelligible that is sufficient to hold that the noticee was not given proper opportunity to meet the allegations indicated in the show cause notice. 15. The Madras High Court in Commissioner of Central Excise, Chennai-I a lso observed that the Show Cause Notice has to give material particulars since it is the very basis and foundation for the proceedings initiated by the department. 16. In such circumstances, when the Show Cause Notice, which is the foundation on which the department has to build up its case, is vague and lack details, it has to be held that the impugned order based on such a Show Cause Notice is bad in law and cannot be sustained. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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