Negative list coverage and point of taxation rules required fresh examination before sustaining the post-2012 service tax demand.

Service tax demand for the post-01.07.2012 period could not be sustained without examining whether the services fell within the negative list and without properly applying the point of taxation rules. The adjudicating authority had not dealt with the assessee's contention on negative-list coverage, and the Revenue's challenge to the partial dropping of demand also required analysis of when the services were rendered and when consideration was received. In the absence of such consideration, the controversy could not be finally resolved at appellate stage. The impugned orders were set aside and the matter remanded for fresh adjudication after considering the relevant law and granting a hearing to the assessee.

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Issues: Whether the demand of service tax for the period after 01.07.2012 could be finally sustained without examining the assessee's plea that the services fell within the negative list and without properly applying the point of taxation rules.

Analysis: The adjudicating authority did not deal with the assessee's contention that the services were covered by the negative list after 01.07.2012. The Revenue's objection to the dropping of part of the demand also required examination in the light of the point of taxation rules and the statutory treatment of services rendered versus consideration received. In the absence of such consideration, the controversy could not be conclusively decided at the appellate stage.

Conclusion: The impugned orders were set aside and the matter was remanded to the adjudicating authority for fresh adjudication after considering the entire law on the subject and after giving the assessee an opportunity of hearing.

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