Service Tax Demand Can Be Made Only For The Category Which Has Been Alleged In The SCN

In the case of Jagatjit Industries Ltd v Commissioner of Central Excise, Ludhiana (Stay Order No. ST/S/563 of 2012-CUS, Application No ST/2145 of 2011, Appeal No ST/1027 of 2011), it has been held that once the demand of tax under a specific category has been proposed under show cause notice, then adjudication cannot be done under different category.

In this case, the appellants were issued Show Cause Notices proposing confirmation of service tax falling under the category of ‘Management Consultancy Services’. However, the demand in that case was confirmed on the ground that the appellant has provided franchisee services. The Tribunal vide its stay Order No. ST/315/2011 dated 2.6.2011 granted unconditional stay on the ground that the confirmation of service tax under a category different than the one mentioned in the Show Cause Notice cannot be permitted.

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