Service tax demand cannot rest on a ground outside the show cause notice; individual truck operator transport was not taxable GTA service.

Service tax demand was held unsustainable where the adjudication order confirmed liability on a ground not raised in the show cause notice; the Tribunal applied the rule that a demand cannot be upheld on an unnotified basis, and the assessee succeeded on this issue. Transportation received from individual truck operators, rather than a Goods Transport Agency, was treated as non-taxable recipient-side GTA service because the assessee's factual position was uncontroverted and the Tribunal's earlier ruling on individual truck operators was applied. The impugned demand, interest, and penalty were set aside.

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Issues: (i) whether service tax demand could be sustained when the adjudication order confirmed it on a ground not raised in the show cause notice; and (ii) whether transportation services received from individual truck operators, rather than a Goods Transport Agency, were liable to service tax in the hands of the recipient.

Issue (i): whether service tax demand could be sustained when the adjudication order confirmed it on a ground not raised in the show cause notice.

Analysis: The demand in the show cause notice was proposed on one basis, while the adjudication order confirmed it on a different basis relating to the conditions for abatement under Notification No. 32/2004-ST. A demand cannot be upheld on a ground not put to notice in the proceedings.

Conclusion: The demand was not sustainable on this ground and the finding was in favour of the assessee.

Issue (ii): whether transportation services received from individual truck operators, rather than a Goods Transport Agency, were liable to service tax in the hands of the recipient.

Analysis: The assessee consistently maintained that the transport service was provided by individual truck operators and not by a Goods Transport Agency, and this position was not controverted. On these facts, the Tribunal's earlier ruling that no service tax is payable by the recipient where transportation is undertaken by individual truck operators was applied.

Conclusion: The service received was treated as transport by individual truck operators and not as a taxable Goods Transport Agency service, resulting in no liability on the assessee.

Final Conclusion: The impugned demand, interest, and penalty were set aside and the appeal succeeded.

Ratio Decidendi: A service tax demand cannot be sustained on a ground not alleged in the show cause notice, and transportation by individual truck operators does not attract recipient-side liability as Goods Transport Agency service.

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