Scientific and technical consultancy classification fails where the notice and adjudication do not examine the actual activity.

Demand under scientific and technical consultancy service could not be sustained where the show cause notice did not clearly set out the appellant's actual activity and the adjudication order did not examine whether that activity fell within Section 65(92) of the Finance Act, 1994. The classification was based on an unsupported premise rather than the tested facts, and this defect rendered the demand legally infirm for breach of natural justice. The orders of the lower authorities were therefore set aside and the demand failed.

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Issues: Whether the demand could be sustained when the appellant's activity was not shown in the show cause notice or examined in the adjudication order as falling within scientific and technical consultancy service under Section 65(92) of the Finance Act, 1994.

Analysis: The adjudicating authority proceeded on the basis that the appellant rendered scientific and technical consultancy service without first testing the actual activity undertaken by the appellant. The show cause notice also did not disclose the activity with sufficient foundation to support the proposed classification. The demand was therefore founded on a premeditated and unsupported premise, and the adjudication was held to suffer from legal infirmity and violation of natural justice.

Conclusion: The demand could not be sustained. The orders of both authorities were set aside and the appeal was allowed.

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