Service tax demand under Section 73 failed where Section 71A was absent from the show-cause notice and notice under Section 73 was untenable.

Service tax demand under Section 73 read with Section 71A of the Finance Act, 1994 was held unsustainable where Section 71A had not been invoked in the show-cause notice. The demand had been confirmed on the basis of a Tribunal decision, but that approach could not override the Supreme Court's later binding view on Goods Transport Operators service. The Supreme Court held that persons covered by Section 71A were not brought within Section 73, so show-cause notices issued under Section 73 for such liability were not maintainable. On that reasoning, the demand failed.

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Issues: Whether service tax demand under Section 73 read with Section 71A of the Finance Act, 1994 could be sustained when Section 71A had not been invoked in the show-cause notice.

Analysis: The demand was confirmed under Section 73 read with Section 71A, but Section 71A was not part of the show-cause notice. The order of the Commissioner was also founded on a Tribunal decision that could not prevail against the binding view of the Supreme Court in the later decision concerning Goods Transport Operators service. In the binding decision, the Supreme Court agreed that the class of persons covered by Section 71A was not brought within Section 73, and therefore show-cause notices invoking Section 73 for such liability were not maintainable.

Conclusion: The demand confirmed under Section 73 read with Section 71A was not sustainable, and the assessee succeeded on this issue.

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