TaxTMI 
TaxTMI 
2026 (7) TMI 1540
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.... - III) dated 31.10.2011, whereby, the Commissioner (Appeals) upheld the demand of service tax along with interest while extending benefit of Section 80 of the Finance Act, 1994 setting aside the penalties. 2. The fact in brief is, that the appellant is a partnership firm engaged in testing Dielectric strength of Transformer Oil and Protective Relays and issuance of Test Certificates recognised by the Electrical Inspection Division of the State Government before release of electricity connection. The appellant was registered under taxable category Testing, Inspection and Certification Service and regularly discharged service tax on such services. 3. Audit conducted by the Department noticed that the appellant had collected certain amo....
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....hether liaison charges collected by the appellant are classifiable under Business Auxiliary Services ? ii) Whether the SCN is legally sustainable when it fails to specify the exact clause of Section 65(19) of the Finance act? iii) Whether demand can survive on merit? 13. Section 65(19) of the Finance Act, 1994 defines Business Auxiliary Services as follows: (19) "business auxiliary service" means any service in relation to, - (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of ....
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....e proceedings. Show Cause Notice is the foundation of adjudication. If the foundation is defective, subsequent proceedings cannot survive. In the case of United Telecom Ltd., Vs CST, Hyderabad [2011 (22) STR 571 (Tri-Bang)], Tribunal held that no demand can be sustained where notice fails to specify precise statutory provision. Relevant para of the decision is as follows: 6. We find that no demand can be confirmed against any person towards service tax liability unless he/it is put on notice as to its exact liability under the statute. In the show-cause notice basic to the proceedings, the impugned activities were proposed to be classified under BAS and BSS. This proposal was confirmed by the Original Authority. We find that this o....
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....f service that was to be taxed and for this it was necessary for the Department to point out the specific clause out of seven clauses mentioned in Section 65(19) of the Act but that was not mentioned in the show cause notice. In support of this contention, Learned Counsel has placed reliance upon the decisions of the Tribunal in Commissioner of Customs & Central Excise, Goa v. Swapnil Asnodkar [2018 (10) G..S.T.L. 479 (Tri. - Mumbai)] and United Telecoms Ltd. v. Commissioner of Service Tax, Hyderabad [2011 (22) S.T.R. 571 (Tri. - Bang.)]. 22. In Swapnil Asnodkar, a Division Bench of the Tribunal observed as follows :- "4. We have carefully considered the submission made by both sides. We find that though in the SCN the Res....
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..... Demand under sub-clause (vii) could be on activities relatable to either one of the preceding six sub-clauses. Therefore, if a notice issued proposing demand under BAS, the noticee will not be aware as to the precise ground on which tax is proposed to be demanded from him unless the sub-clause is specified. In the instant case, Service Tax was proposed to be demanded for an activity under BAS and BSS. Under BSS also several activities are listed as exigible under that head. In the absence of proposal in the show-cause notice as to the liability of the assessee under the precise provision in the Act, we find the demand to be not sustainable." 24. The aforesaid two decisions of the Tribunal clearly hold that it is imperative for th....