Whether authorities can travel beyond the show cause notice?

PJ/Case Laws/2012-13/1265

Case:- ENPEE EARTHMOVERS versus COMMISSIONER OF CUS. & EX., GOA

Citation:- 2012 (27) S.T.R. 48 (TRI.-MUMBAI)

Brief Facts:-The Appellant is providing the services of excavation of mines, drilling, leveling, loading, hiring of machinery etc. and hence the show cause notice was issued proposing to levy service tax under the category of ‘BAS’ whereas the demand of service tax with interest was confirmed on the grounds that 'handling at plant' and 'loading' amounted to providing "Cargo Handling Service". Further, penalty equal to the service tax under Section 78 was also imposed. The demand in respect of other two services provided was dropped. The appeal filed by the appellant against this order was rejected by the Commissioner.

Appellant Contention:-The learned counsel, on behalf of the appellant, submitted that the show cause notice had proposed demand of service tax on all the services rendered by the appellant under the category of 'Business Auxiliary Service' whereas the original adjudicating authority confirmed the demand in respect of a portion of the services rendered under the category of 'Cargo Handling Service'. Therefore, the adjudicating authority has travelled beyond the show cause notice and he submits that on this ground alone the appeal itself is to be allowed and there is no justification for the proceedings of the impugned order. He also relies upon several decisions to support this view.

Reasoning of Judgement:-We have considered the submissions. In this case, the show cause notice was issued proposing demand of service tax on the services rendered under the category of 'Business Auxiliary Service' whereas the confirmation of demand and imposition of penalty has been done by treating the services rendered as 'Cargo Handling Service'. Therefore, we find that, as submitted by the counsel, the original adjudicating authority as well as the appellate authority has travelled beyond the show cause notice. We also find that the Tribunal in the case of Joginder Pal v. Commissioner of Central Excise, Gurgaon - 2011 (21) S.T.R. 666 (Tn.Del.) had taken the same view and had set aside the demand. Following the precedent decision cited and also upholding the submission that the authorities have gone beyond the show cause notice, we set aside the impugned order and allow the appeal. The stay petition also stands disposed of.

Decision:-Appeal Allowed.

Comment:- It is very good case wherein the show cause notice has been issued under BAS but the demand was confirmed under Cargo handling services. This is being normally done by adjudication authority. The same adjudication officer issue the show cause notice and then decide the case. Hence when the fault is pointed out in show cause notice then he does not accept the same. Hence, for fair adjudication process, the demand issuing and adjudication officer should be different. Thus, the proper adjudication process can take place. It will save the time and money and authorities will not be bent upon to decide the case against the assessee.

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PJ/Case Laws/2012-13/1265

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