TaxTMI 
TaxTMI 
2026 (9) TMI 187
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....gn travel, tuition/training fees and membership fees, followed by six SCNs/SODs covering subsequent periods. The Appellant has contended that the pre-01.07.2012 notices have failed to identify the taxable service under Section 65(105) of the Finance Act, 1994. It appears that the Appellant has produced invoices and transaction-wise details showing expenditure on travel, tuition, memberships, subscriptions, publications and professional services, with tax already paid on several transactions. 2. The adjudicating authority dropped the pre01.07.2012 demands and penalties which is challenged by the revenue before the Lower Appellate Authority as the Commissioner (Appeals) held that absence of classification in the notices did not invalidate the proceedings, classified tuition fees as Commercial Training or Coaching Service and membership fees as Club or Association Service, and restored the demand of Rs.27,69,126/- with interest and penalty of Rs.19,54,482/- under Section 78. The present appeals challenge the order on the ground that the Commissioner (Appeals) travelled beyond the show cause notices by introducing classifications not proposed therein. 3.1 The Ld. Advocate Shri G.....
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....ese transactions. 3.4 The Ld. Counsel further averred that the demand was revenue-neutral since any service tax paid under reverse charge would, subject to the statutory conditions, is available as CENVAT credit. Reliance is placed upon Jay Yuhshin Ltd. v. Commissioner of Central Excise, New Delhi, 2000 (119) E.L.T. 718 (Tri.-LB), Anglo French Textiles v. CCE, Puducherry, 2017 (9) TMI 1178 (CESTAT Chennai), affirmed by the Supreme Court in 2018 (8) TMI 896, Permanent IP Systems/Perfect Technologies, 2018 (12) TMI 19 (CESTAT Kolkata), Sarovar Hotels Pvt. Ltd. v. Commissioner of Service Tax, Mumbai, 2017 (9) TMI 893 (CESTAT Mumbai) and Intellect Design Arena Ltd. v. Commissioner of GST & Central Excise, Chennai, 2025 (12) TMI 1004 (CESTAT Chennai). 3.5 Finally, the Appellant submitted that invocation of the extended period and imposition of penalty were unsustainable. The Appellant had maintained accounts, disclosed the expenditure particulars, participated in audit proceedings and, in several cases, voluntarily discharged service tax. There was consequently no suppression of facts or intent to evade payment of tax. The Appellant therefore prayed for setting aside the impugned ....
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....sm for taxing specified taxable services received from outside India. Therefore, Section 66A could not operate merely because an assessee had incurred expenditure in foreign currency. The Department was required to establish that the expenditure represented consideration for a service falling within one of the taxable categories under Section 65(105). 8. In the present case, the notices proceeded essentially on the basis that the Appellant had incurred foreign-currency expenditure and had not discharged service tax under Section 66A read with Rule 2(1)(d)(iv). The notices did not identify the particular taxable service allegedly received. This is significant because the expenditure was not homogeneous. It included foreign travel expenditure, tuition/e-learning fees, membership and subscription payments, leadership programmes, publications, study material and professional fees. The invoices and documents produced by the Appellant similarly disclosed different kinds of transactions. 9. The adjudicating authority noticed this defect and, for the pre-01.07.2012 period, dropped the demands. The Commissioner (Appeals), however, proceeded on the basis that the nature of the expendit....
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....adjudicating authority cannot decide the matter on a basis different from that contained in the notice without giving the assessee an opportunity to meet such a case. 14. The same principle emerges from Hindustan Polymers Co. Ltd. v. Collector of Central Excise, Guntur, 1996 (12) TMI 84 (S.C.), relied upon by the Appellant. Where the basis of the demand is materially changed, the adjudication cannot proceed on the new basis without the assessee being put to notice. 15. The Appellant also relied upon Principal Commissioner, Service Tax, Delhi v. Shubham Electricals, 2016 (5) TMI 1055 (Delhi High Court), concerning vagueness in the notice and the failure to clearly identify the taxable service. The principle supports the requirement that the taxable service forming the basis of the demand must be sufficiently disclosed. 16. The decisions relied upon by the Appellant may, therefore, be succinctly stated as follows: a show cause notice is the foundation of adjudication; the assessee must know the precise statutory charge it is required to meet; and a new substantive basis of demand cannot ordinarily be introduced at the appellate stage. We find these principles applicable to t....
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....) : Interest, penalty and subsequent notices: - 22. Once the substantive demand of Rs.27,69,126/- restored by the Commissioner (Appeals) is found unsustainable, the consequential interest cannot survive. Interest is consequential upon a legally recoverable tax liability. 23. The penalty of Rs.19,54,482/- under Section 78 also cannot be sustained. The Commissioner (Appeals) proceeded principally on the ground that the expenditure had been detected during audit and had not been disclosed in the ST-3 returns. However, penalty under Section 78 requires the statutory ingredients for invoking the extended period to be established. Where the very demand rests upon a taxable classification which was absent from the notices, the necessary foundation for alleging suppression with intent to evade is absent. It is not disputed that the Appellant had maintained books and produced the relevant expenditure particulars and supporting documents. 24. The Appellant's plea of revenue neutrality, based upon Jay Yuhshin Ltd. v. Commissioner of Central Excise, 2000 (119) E.L.T. 718 (Tri.-LB), Anglo French Textiles v. CCE, Puducherry, 2017 (9) TMI 1178 (CESTAT Chennai), affirmed by the Hon....