The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the demand for service tax which was imposed on the marketing services on the ground of non-specific mentioning of service category in the show cause notice. The Bench held that the show cause notice does not have enough details about the service category which was not specific.
Dr.Jagjeet Singh Parwana, the appellant assessee was engaged in providing Marketing Service/ Distributorship and promotion of health care products of Daehsan Trading India Pvt. Limited and were also working as a distributor and the work of the assessee included canvassing for the merits of becoming an agent/ distributor and enrolling new agents/ distributors.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the demand for service tax imposed on marketing service along with penalty and interest.
Atul Gupta, the counsel for the assessee contended that the show-cause notice is flawed since though the demand was raised under the Head “Business Auxiliary Service” and no particular sub-clause, under Section 65(19) of the Finance Act, 1994, was specified.
Further submitted that the impugned order was liable to be set aside for demanding tax without specifying the service and on limitation, these issues do not require any consideration and the demand needs to be limited to the period 2010-11 alone; in that case, too no service tax would be payable by the assessee as the total taxable value for 2010-11 falls within the exemption limit prescribed for Small-Scale Units.
Raman Mittal, the counsel for the department relied on the decisions made by the lower authorities and contended that the demand raised by the adjudicating authority was as per the law and liable to be sustained.
The Bench observed that the impugned order cannot be sustained as there was no specific allegation in the show-cause notice on the category of the „Business Auxiliary Service‟ and also the order was not sustainable on limitation.
The two-member bench comprising S.S Garg (Judicial) and Anjani Kumar (Technical) quashed the demand for service tax imposed on the assessee while allowing the appeal filed by the assessee.
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