Assessment must precede a Section 73A(3) demand, as service tax determination is required first.

Section 73A(5) indicates that amounts paid to the credit of the Central Government are adjusted only after finalisation of assessment or other proceedings for determination of service tax. On that construction, a demand under Section 73A(3) cannot be raised before such assessment or determination by the Central Excise Officer. The commentary treats the earlier view as governing the controversy and states that assessment must precede the demand mechanism under Section 73A(3).

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Issues: Whether determination of service tax by the Central Excise Officer is necessary before making a demand under Section 73A(3) of the Finance Act, 1994.

Analysis: Section 73A(5) provides that the amount paid to the credit of the Central Government under the relevant sub-sections is to be adjusted on finalisation of assessment or other proceedings for determination of service tax. On that construction, a demand under Section 73A(3) cannot precede assessment. The earlier view that the power to raise demand arises only after adjudication and assessment was treated as governing the controversy.

Conclusion: Yes. Determination of service tax by the Central Excise Officer is necessary before a demand under Section 73A(3) can be raised, and the issue was answered in favour of the assessee.

Ratio Decidendi: Under Section 73A(5), assessment or determination of service tax must precede a demand under Section 73A(3).

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