Show cause notice mismatch defeats service tax demand when adjudication confirms liability on a different taxable head.

A service tax demand was held unsustainable because the adjudication order confirmed liability under Business Auxiliary Service even though the show cause notice had proposed tax under Advertising Services. The confirmation travelled beyond the scope of the notice, and a demand cannot be sustained on a taxable head or legal basis materially different from that alleged in the notice. On that jurisdictional defect, the demand and impugned order were set aside without examining the merits of taxability of the incentives.

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Issues: (i) Whether a demand of service tax could be sustained when the show cause notice proposed tax under Advertising Services but the adjudication order confirmed it under Business Auxiliary Service.

Issue (i): Whether a demand of service tax could be sustained when the show cause notice proposed tax under Advertising Services but the adjudication order confirmed it under Business Auxiliary Service.

Analysis: The notice proposed liability on the basis of Advertising Services, whereas the adjudication order confirmed the demand under Business Auxiliary Service. The discrepancy meant that the adjudication travelled beyond the scope of the notice. Since a demand cannot be confirmed on a footing not proposed in the show cause notice, the confirmation was unsustainable. The matter was therefore decided on this preliminary ground without examining the merits of taxability of the incentives.

Conclusion: The demand could not be sustained because the adjudication order went beyond the show cause notice, and the assessee succeeded on this issue.

Final Conclusion: The impugned order and the confirmed demand were set aside, and the appeal succeeded on the ground of jurisdictional defect arising from departure from the show cause notice.

Ratio Decidendi: A demand cannot be confirmed on a legal basis or taxable head that is materially different from the one alleged in the show cause notice.

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