Small service provider exemption is year-specific, and undisputed threshold compliance can defeat a service tax demand.

Small service provider exemption is available year by year, and an option not to avail it in one financial year does not permanently bar its use in later years. Where the department does not dispute that the assessee's aggregate taxable receipts for the relevant years remain below the prescribed threshold, service tax demand cannot be sustained on a cumulative or permanent-denial basis. On the available record, the exemption was applicable and relief was warranted.

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Issues: Whether the demand of service tax could be sustained when the assessee's aggregate taxable receipts were stated to be below the exemption threshold and the exemption under the small service provider notifications was claimed for the relevant years.

Analysis: The notifications governing small service provider exemption provided that the service provider could opt not to avail the exemption in a financial year, but once such option was exercised it would remain operative only for that financial year and could not permanently bar the benefit in subsequent years. The revenue did not dispute that the aggregate value of taxable services for the years in dispute was below the threshold limit prescribed under the notifications. In these circumstances, the demand could not be sustained merely on the basis of the lower authorities' reasoning, and relief was warranted on the available record.

Conclusion: The demand was unsustainable and the issue was decided in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeal succeeded with consequential relief as per law.

Ratio Decidendi: Where a small service provider exemption is available year-wise and the department does not dispute that the turnover for the relevant years remains within the prescribed threshold, the exemption cannot be denied on a permanent or cumulative basis across years merely because it was exercised in an earlier financial year.

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