Show cause notice scope and historical monument exemption defeat service tax demand on construction works at Coronation Park.

Service tax demand could not be sustained where the adjudicating authority confirmed liability under Works Contract Service after the show cause notice proposed a different taxable category, because a demand must stay within the charge set out in the notice and cannot be enlarged in violation of natural justice. The exemption under Notification No. 25/2012-ST for services in relation to a historical monument was also held applicable to construction and allied works at Coronation Park, including parking and other public utility structures, as the site was treated as a historical monument and the works were not commercial in nature. The revenue challenge failed and the assessee obtained full relief.

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Issues: (i) whether service tax demand could be sustained when the adjudicating authority confirmed it under Works Contract Service though the show cause notice proposed a different taxable category; (ii) whether the construction activity relating to Coronation Park, including parking and connected structures, was covered by the exemption for services rendered in relation to a historical monument under Notification No. 25/2012-ST.

Issue (i): whether service tax demand could be sustained when the adjudicating authority confirmed it under Works Contract Service though the show cause notice proposed a different taxable category.

Analysis: The show cause notice was the foundation of the demand and proceeded on the basis of one taxable category, while the adjudication order confirmed liability under a different head. A demand cannot be sustained on a classification not put to the assessee in the notice, because the assessee must be able to meet the precise charge. The change in classification from the notice to the order amounted to travelling beyond the notice and offended natural justice.

Conclusion: The demand confirmed under Works Contract Service was unsustainable and was set aside in favour of the assessee.

Issue (ii): whether the construction activity relating to Coronation Park, including parking and connected structures, was covered by the exemption for services rendered in relation to a historical monument under Notification No. 25/2012-ST.

Analysis: Coronation Park was treated as a historical site of national importance, and the exemption under Sl. No. 12 of Notification No. 25/2012-ST extended to services by way of construction and allied works for a historical monument. The parking facility associated with the park was found to be for public utility and not commercial in nature. The department's attempt to sustain demand on parts such as the International Centre and Restaurant also failed because the confirmed demand had been made under a different head than the one proposed in the show cause notice.

Conclusion: The exemption was held applicable and the revenue's challenge was rejected.

Final Conclusion: The assessee succeeded on the principal demand, while the revenue's cross appeal failed, resulting in complete relief to the assessee on the disputed levy.

Ratio Decidendi: A service tax demand cannot be confirmed under a taxable category different from the one proposed in the show cause notice, and exemption for services connected with a historical monument extends to non-commercial public utility works falling within the notified entry.

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