Reverse charge liability requires proper service classification and record scrutiny; blasting, consultancy and maintenance demands were set aside.

Reverse charge liability depends on the service category, the recipient's statutory coverage, and the applicable notification; where the record does not establish that the supplied service falls within the notified reverse charge entry, the demand cannot stand. On the facts discussed, the demands relating to blasting and painting, consultancy charges, and repair and maintenance were held unsustainable because the supporting documents were not properly verified and the asserted taxable classification was not proved.

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Issues: (i) whether service tax under reverse charge mechanism was payable on blasting and painting services received from corporate entities; (ii) whether service tax was payable on consultancy charges treated as consultancy other than legal consultancy; and (iii) whether repair and maintenance service was covered by reverse charge mechanism.

Issue (i): whether service tax under reverse charge mechanism was payable on blasting and painting services received from corporate entities.

Analysis: Liability under reverse charge depended upon the category of service provider and the applicable notification. The record did not justify fastening reverse charge liability on the recipient where the services were provided by corporate entities and the notice had been issued without proper scrutiny of the underlying service documents.

Conclusion: The demand on blasting and painting services was not sustainable and was set aside.

Issue (ii): whether service tax was payable on consultancy charges treated as consultancy other than legal consultancy.

Analysis: The demand was founded on book entries showing consultancy and legal charges together, but no material established that the confirmed demand represented taxable legal consultancy. The recipient's explanation that the liability, if any, related to consultancy other than legal consultancy was accepted, and the notice was not supported by adequate verification of records.

Conclusion: The demand on consultancy charges was not sustainable and was set aside.

Issue (iii): whether repair and maintenance service was covered by reverse charge mechanism.

Analysis: The parties agreed that repair and maintenance service did not fall within the reverse charge category invoked in the notice. Once that position was accepted, the corresponding demand and consequential interest and penalty could not survive.

Conclusion: The demand on repair and maintenance service was not sustainable and was set aside.

Final Conclusion: The confirmed demands, except the portion not pressed, were annulled, and the appeal succeeded to the extent of the surviving disputed demand.

Ratio Decidendi: A demand under reverse charge mechanism cannot be sustained unless the service category and recipient liability are established on proper scrutiny of records and within the scope of the applicable notification.

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