ORDER
S.L. Peeran, Member (J)
1. This appeal arises from Order-in-Original No. 1/2005 ST (Comm.) dated 19.12.2005 confirming Service Tax for the period 1.7.2003 to March 2005 in terms of show cause notice dated 28.7.2005 without invoking the proviso of amended Section 73 brought in 10.9.2004. The proviso to Section 73 is pari materia to Section 11A of CE Act. It is the contention of the appellant that as the show cause notice did not allege suppression of facts or misstatement or fraud or other elements required for confirmation as per the amended Section 73 of Finance Act, the demands cannot be confirmed for the period 1.7.2003 onwards. It is their submission that once the amended Section 73 has been promulgated on 10.9.2004, therefore, it is imperative on the part of the department to have invoked the larger period by stating the ingredients of proviso which are pari materia to the Section 11A of the Central Excise Act.
2. The learned Counsel refers to the Larger Bench judgment rendered in the case of Atma Steels Pvt. Ltd. and Ors. v. CCE, Chandigarh and Ors. 1984 (17) ELT 331 (T) wherein it has been clearly held that once the provisions has been changed, then the existing provisions at the time of issue of show cause notice should be applicable and not the earlier provisions. In this case, the earlier provision of Section 73 of the Finance Act provides for issue of notice for recovery of Service Tax for 5 years where there is failure on the part of the assessee to pay the Service Tax. The time limit has not been prescribed as is done in the amended Section 73 of the Finance Act. He further submits that the appellants were carrying on the activity of transporters. There are certain amounts collected by them. The Department in the show cause notice proceeded to recovery the said elements under the category of ‘Management Consultants’. The Commissioner in the impugned order clearly held that Service Tax under this category cannot be confirmed but however, he proceeded to confirm the demands under another category i.e. under the category of ‘Business Auxiliary Services’. The show cause notice had not sought this category for taxing purpose, therefore, the confirmation of demands under this category is beyond the terms of show cause notice. On these two grounds, he prays for setting aside the order.
3. The Commissioner has filed a written submission and contended that the confirmation of demand is justified. It is contended that although the proviso to Section 73 has not been invoked as the demands pertain to earlier period also, however, the show cause notice issued under the previous provisions of Section 73 is sustainable. The learned JDR argued on the above basis.
4. On a careful consideration, we are not agreeable with the contentions raised by the Commissioner in the written submissions and the learned JDR. The proviso to Section 73 of the Act was promulgated by Finance Act 2004 but adding proviso to Section 73 of the Central Excise Act, which is pari materia to Section 11A of Central Excise Act. The ingredients of the said proviso have not been invoked in the show cause notice to demand duty for larger period. The contention of the Revenue that the demands pertaining to period earlier to promulgation of the new Section 73 should be confirmed in terms of the deleted provisions of Section 73, is not sustainable. The Larger Bench judgment rendered in the case of Atma steel (supra) has clearly held that once a new provisions has been brought into existence, then at the time of issue of show cause notice the new provisions as is in existence should be complied. The show cause notice has been issued in the present case on 28.7.2005, therefore, the amended provisions in terms of Section 73 of the Finance Act 2004 ought to have been invoked. The ingredients of proviso to Section 73 have not been invoked, therefore, the demands are barred by time. Furthermore, as held in the Atma Steel case (supra), the demands for the period earlier to promulgation cannot be confirmed.
4.1 Further, the Revenue had proceeded to raise demands in respect of certain amounts received by the appellants under the category of ‘Management Consultant’ by the impugned order. The Commissioner accepted the assessee’s plea that the taxable services viz., Cargo Handling Services, Maintenance or Repair Services, Management Consultancy Services Advertising Agents’ Services, etc., cannot be brought within the category of ‘Management Consultancy Services’ in terms of the Finance Act. However, the Commissioner has proceeded to confirm demands under another heading i.e. ‘Business Auxiliary Services’ which had not been alleged in the show cause notice. The Commissioner cannot change the character of the show cause notice and confirm demands under different heading and category then the one alleged in the show cause notice. Therefore, the contention raised by the learned Counsel for non-confirmation of demands is justified. There is no basis for confirmation of demands and the order is not legal and proper. The impugned order is set aside by allowing the appeal with consequential relief, if any.
(Pronounced in open Court on 20.11.2006)