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8 Mar 2018

Demand of service tax is not sustainable, if breakup of services not provided in SCN

Recently the Allahabad bench of the CESTAT issued order in the matter of (2018) 90 taxmann.com 332 (Allahabad - CESTAT) CESTAT, ALLAHABAD BENCH Dharambir Singh and Company v. Commissioner of Customs, Central Excise and Service Tax, Noida by setting aside the OIO issued by the adjudicating authority without having bifurcation of the demand raised and with the contradiction of reference of the information provided by the Assessee and further allegation of not providing proper details and/or invoices Etc. The counsel for the appellant contended that in the reply to the show cause notice, they had given the breakup of the turnover, year wise, as is evident from the Annexure-II to the reply to SCN which is part of the appeal paper book. The appellant have given the receipts under various heads like services provided to units in SEZ, Hire Charges for machinery/JCB, soil supply or sale. Therefore bench find that the learned Commissioner failed to discuss the breakup, given by the appellant and have rejected the same on flimsy ground.

The Bench in this respect held as under

Having considered the rival contentions, we find that the show cause notice is vague and unsustainable, as it fails to give the breakup under the different heads of service, allegedly provided by the appellant. We also notice that the show cause notice is self contradictory, as in para-5 of the SCN, detailed breakup is given of the services provided by the appellant and/or the business activities, whereas in the later part of the show cause notice, it is alleged that appellant have failed to provide proper details and/or invoices etc. We also notice that there is no case of disobedience of any summons or notices or any information sought by the Department. Accordingly, we hold that the show cause notice is bad and unsustainable, being vague and lacking in the gist of accusations, as well as breakup of the demand. Accordingly, we set aside the impugned order and allow this appeal. The appellant shall be entitled for consequential benefits, in accordance with law. The other grounds of appeal are left open under the facts and circumstances.”

Therefore the view may be taken from the above said judgement that the demand raised without proper breakup in the SCN shall not be sustainable.