Tribunal Cancels Service Tax Demand of Rs. 1.11 Crore for Consulting Services Overlapping Show Cause Notices

The Tribunal set aside the Service Tax demand for Consulting Engineering Services amounting to Rs. 1.11 Crore for the period from 2005-06 to 2009-10, as the show cause notice invoking the extended period of limitation was deemed unsustainable due to overlapping with an earlier notice based on the same agreement. The appeal was allowed based on the precedent established by the Hon'ble Supreme Court in a similar case, leading to the cancellation of the demand and penalty imposed by the Commissioner.

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Issues:
1. Service Tax demand for Consulting Engineering Services.
2. Show cause notice invoking extended period of limitation.
3. Sustainability of show cause notice dated 21.10.2010.

Service Tax demand for Consulting Engineering Services:
The appeal was against an Order-in-Original passed by the Commissioner, Customs, Central Excise & Service Tax, Noida, regarding a demand of Service Tax amounting to Rs. 2.25 Lakhs for the period from 2004-05 to 2007-08. The demand was raised for the activity undertaken by the appellant under the category of "Consulting Engineering Services." Subsequently, another show cause notice was issued for a demand of Rs. 1.11 Crore for the period from 2005-06 to 2009-10 under the same category. The demand was confirmed and penalty imposed, leading to the appeal before the Tribunal.

Show cause notice invoking extended period of limitation:
The appellant argued that the second show cause notice dated 21.10.2010, invoking the extended period of limitation, was not sustainable as it was based on the same agreement that formed the basis of the earlier show cause notice dated 05.02.2009. The appellant contended that the law laid down by the Hon'ble Supreme Court in the case of Nizam Sugar Factory v. Collector of Central Excise, Andhra Pradesh, rendered the second notice unsustainable.

Sustainability of show cause notice dated 21.10.2010:
After considering the submissions and examining the record, the Tribunal found that both show cause notices were based on the same agreement between the appellant and NOIDA authority. The period covered by the two notices overlapped, indicating that the second notice was issued invoking the extended period on the same set of facts. Citing the precedent set by the Hon'ble Supreme Court in the case of Nizam Sugar Factory, the Tribunal concluded that the show cause notice dated 21.10.2010 was not sustainable. Consequently, the impugned order was set aside, and the appeal was allowed.

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