Service tax liability cannot be shifted to a company without proof it is the same legal entity as the partnership firm.

Service tax liability for past services of a partnership firm could not be fastened on a private limited company without proof that both were the same legal entity. The incorporation documents, memorandum and articles of association showed that a different entity had been converted into the appellant company, not that the partnership firm itself had been incorporated. In the absence of evidence linking the firm to the company as one continuing entity, the demand for service tax, interest and penalty in respect of the firm's earlier services could not be sustained against the company.

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Issues: Whether the private limited company could be held liable for service tax, interest and penalty on services rendered earlier by a partnership firm.

Analysis: The record did not support the department's claim that the partnership firm had been incorporated as the appellant company. The incorporation documents and memorandum and articles of association showed that a different entity had been converted into the appellant company. In the absence of proof linking the partnership firm with the appellant company as the same legal entity, liability for the firm's service tax dues could not be fastened on the appellant.

Conclusion: The appellant was not liable to pay the service tax, interest and penalty demanded in respect of the partnership firm's past services.

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