2026-VIL-1804-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Validity of SCN issued on reconciliation of figures in ST-3 returns and permissibility of grounds raised by Revenue in appeal - SCN was issued on the basis of short payment noticed on scrutiny of the returns, including an amount deposited as arrears without clarification of the payment or period to which it related - Respondent was asked by letter and reminder to furnish information but did not reply - Adjudicating authority confirmed the demand only in part and dropped the rest, and Revenue appealed - Respondent contended that SCN contained no allegation regarding the nature, place, manner or taxability of any transaction and that Revenue was building a new case in appeal - Whether the SCN is valid and whether the grounds urged by Revenue travel beyond the SCN - HELD - The impugned order itself records that the Respondent did not reply to the information sought by the jurisdictional office. In view of such lack of cooperation, with documents on the nature of services not furnished, the contention that the SCN does not contain specific allegations or that the grounds taken by Revenue were not taken in the SCN cannot be accepted - The SCN is held to be valid - Taxability of services rendered in alleged non-designated areas beyond twelve nautical miles and services rendered to an oil company at a centre in India - Demand on services provided to contractors of an oil company at installations under agreements for cementing and well stimulation, and on services under a contract for operating an optimisation centre located in India, was dropped on the ground that the wells were in non-designated areas beyond twelve nautical miles - Revenue contended that the earlier Circular stood superseded by a Notification under which areas of the continental shelf and exclusive economic zone where installations are situated are designated areas, that services at the centre in India were taxable irrespective of the location of wells, and that the Respondent had itself charged and collected service tax in the invoice - Whether the services are outside the levy on the ground that they were rendered beyond the designated areas - HELD - Other than the bare assertion that services were provided beyond the designated area, no evidence was placed to establish the claim, and the adjudicating authority accepted the submissions without documents. There is no discussion on the service agreements with the contractors and the impugned order failed to notice the invoice wherein service tax was charged and collected, which is contrary to the claim of non-liability - The Respondent is to be given an opportunity to submit relevant documents before the adjudicating authority to substantiate that the services were provided beyond the designated area - Liability on training services provided partly in India and partly overseas and claim of payment by the service recipient under reverse charge - Training programme for managers of a recipient company ran for seven weeks, of which six weeks were classroom training in the taxable territory of India and the seventh week was an overseas visit, with consideration received for the whole programme - Adjudicating authority held the recipient liable under reverse charge on the strength of its email, and Revenue contended that the nature of services in the first six weeks and the remuneration for them were not examined and the emails were not cross-checked with challans - Whether the demand on training services can be dropped on the ground that the recipient paid the tax - HELD - The liability for the initial six weeks conducted in the taxable territory has to be examined, and the impugned order failed to discuss the nature of services rendered in that period and the remuneration received. No evidence was led to show payment under reverse charge and the veracity of the emails was not verified against the payment challans - All the issues need to be relooked into by the adjudicating authority, who shall give the Respondent an opportunity to submit documents and be heard in person, the impugned order is set aside and the appeal is allowed by way of remand.
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