Show cause notice service requires proof of delivery; mere issuance cannot sustain time-barred service-tax adjudication proceedings.

Service of a show cause notice under section 73(1) of the Finance Act, 1994 requires proof of actual service, not merely issuance. Service enables the noticee to respond to allegations, produce evidence and seek a personal hearing; the department must establish it through contemporaneous records such as dispatch details, postal receipts, acknowledgments or delivery reports. Where no such evidence was produced and an affidavit of non-service remained uncontroverted, later appellate-stage participation could not cure the defect in statutory adjudication. Failure to establish service within even the extended limitation period rendered the service-tax proceedings unsustainable and the demand time-barred.

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Issues: Whether service of the show cause notice within the prescribed limitation period was established, and whether non-service vitiated the service-tax adjudication.

Analysis: Section 73(1) of the Finance Act, 1994 mandates that the notice be served, rather than merely issued. Service is foundational to adjudication because it enables the noticee to reply, produce evidence, contest allegations and receive a personal hearing. The department bore the burden to establish service but could produce no dispatch particulars, postal receipt, acknowledgment, delivery report or other contemporaneous proof, despite a specific direction. The uncontroverted affidavit asserting non-service was therefore accepted. Subsequent opportunity at the appellate stage could not replace the statutory adjudication process or cure the failure to serve the notice. As service was not established even within the extended limitation period, the proceedings were unsustainable and time-barred.

Conclusion: The show cause notice was not proved to have been served on the assessee; the adjudication was vitiated and the demand was barred by limitation, in favour of the assessee.

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