Whether order can confirm demand under different category and go beyond show cause notice?

PJ/CASE LAW/2016-17/3164

Case:-COMMISSIONER OF CENTRAL EXCISE, GOA VERSUS R.K. CONSTRUCTION

Citation:-2016(41) S.T.R. 879 (Tri.-Mumbai)

Brief Facts:-This appeal is filed by Revenue against Order-in-Appeal No. GOA/CEX/GSK/76/2012, dated 25-10-2012. Assessee has also filed a Cross Objection against the very same Order-in-Appeal. Both are disposed of by a common order.

Reasoning of Judgment:-Heard both sides and perused the records. The first appellate authority has set aside the order-in-original which was challenged before him by recording the following : -
“I have examined the impugned order and submissions. When the Show Cause Notice is issued on the grounds for classification of the services under one category, it is not possible for the adjudicating authority to make a new case different from that alleged in show cause notice. Such an attempt would tantamount to going beyond the show cause notice. The same would be in gross violation of the principles of natural justice, as held in :
I.         Hindustan Polymers Co. Ltd. v. Collector of Central Excise, Guntur - 1999 (106) E.L.T. (S.C.)
II.        GTC Industries Limited v. Collector of Central Excise, New Delhi - 1997 (94) E.L.T. 9 (S.C.)
III.      Commissioner of Central Excise, Meerut v. Hello Mineral Water P. Ltd. - 2001 (130) E.L.T. 716 (Tri. - Del.)
IV.       Enpee Earthmovers v. Commissioner of Customs & Central Excise, Goa - 2012 (27) S.T.R. 48 (Tri.-Mumbai)
Such orders which go beyond the scope of show cause notice are not maintainable under law. Impugned order set aside, Appeal allowed.”
On perusal of the records, we do find that the show cause notice issued to the appellant indicates that the classification of the services is to be considered, under the category of ‘Commercial or Industrial Construction Services’ and directed the respondent to show cause why it should not be done so whereas the adjudicating authority has confirmed the demand of service tax on “Construction of Residential Complex” service which, the first appellate authority has correctly held that the adjudicating authority has traversed beyond the allegation of the show cause notice. If the assessee is not put to notice under which category the service tax sought to be demanded, the conclusion reached by the first appellate authority is correct and does not suffer from any infirmity. Be that as it may, we also find that the contract which has been entered by the respondent is a “works contract” and the entire contract has been executed prior to 1-6-2007. In our view the issue is no more res integra as the judgement of the Hon’ble Apex Court in the case of CCEv. Larsen and Toubro Ltd and Ors. - 2015-TIOL-187-SC-ST = 2015 (39)S.T.R.913 (S.C.)it has been held that works contract cannot be vivisected prior to 1-6-2007 for taxing separately.
In view of the foregoing, we hold that the impugned order is correct and the appeal filed by the Revenue is devoid of merits.
Appeal filed by Revenue is rejected. Cross Objection filed by the respondent is also disposed of.
Decision:- Appeal rejected.

Comment:- The essence of this case is that when the adjudicating authority has issued show cause notice on the grounds for classification of the services under one category, it is not possible for the adjudicating authority to make a new case different from that alleged in show cause notice. The same would be in gross violation of the principles of natural justice and will tantamount to travelling beyond the allegations leveled in the show cause notice.

Prepared by: Mahesh Parmar

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PJ/CASE LAW/2016-17/3164

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