Service tax classification cannot be shifted beyond the show cause notice; new taxable category arguments fail on appeal.

Service tax demand cannot be sustained on a new taxable category introduced for the first time at the appellate stage when the show cause notice proposed liability only as a real estate agent. The respondents were engaged in making furniture to buyer specifications, and the Revenue did not dispute that they were not real estate agents. Shifting the basis of demand to interior decorator/designer beyond the notice was treated as a new case outside the scope of the proceedings, so the Revenue could not alter the classification after issuance of the notice.

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Issues: Whether the Revenue could sustain a service tax demand by shifting the classification from real estate agent to interior decorator/designer at the appellate stage when the show cause notice proposed demand only under the category of real estate agent.

Analysis: The respondents were engaged in making furniture as per buyer specifications. The demand had been proposed in the show cause notice only under the category of real estate agent, and the Revenue did not dispute that the respondents were not real estate agents. The attempt to support the demand on a different taxable category at the appellate stage amounted to raising a new case beyond the scope of the show cause notice.

Conclusion: The Revenue could not change the basis of the demand beyond the show cause notice, and the appeal was rejected.

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