Service tax demands based on CBDT data quashed, with reassessment ordered from the show cause notice stage.

Service tax demands based on CBDT information were set aside and sent back for fresh consideration from the stage of show cause notice. The Court treated the matter as covered by a coordinate bench decision and required the authorities to examine the petitioners' objections on merits, including whether the activity constituted "service" under Section 65B(44) of the Finance Act, 1994, whether it fell within the negative list or Notification No. 25/2012-ST, and whether the demand was barred by limitation. The impugned show cause notice, order-in-original and order-in-appeal were quashed, with reconsideration directed before the designated officers.

---

---

Issues: Whether the impugned show cause notice, order-in-original and order-in-appeal relating to service tax demand based on CBDT data were liable to be quashed and the matters relegated for reconsideration from the stage of show cause notice.

Analysis: The dispute was treated as covered by the coordinate bench decision dealing with service tax proceedings initiated on the basis of information received from the CBDT. The Court noted that the authorities would have to examine the petitioners' objections on merits, including whether the activity fell within Section 65B(44) of the Finance Act, 1994, whether the services were covered by the negative list or by Notification No. 25/2012-ST dated 28.06.2012, whether liability arose under the applicable statutory framework, and whether the demand was barred by limitation. In light of the common course adopted in the connected matters, the impugned proceedings were required to be set aside and the matter sent back for reconsideration from the stage of show cause notice.

Conclusion: The challenge succeeded. The show cause notice, order-in-original and order-in-appeal were quashed, and the matter was relegated to the designated officers for fresh consideration from the stage of show cause notice.

---