Micromatic Grinding Technologies Ltd. v. CCE & ST

FINANCE ACT, 1994

--Demand --ValidityShow cause notice being vague and lacked details ----Where show cause notice demanding service tax under the category of BAS, was vague and lacked details, the impugned order based on such show cause notice was bad in law and could not be sustained.--Assessee-company was issued show cause notice demanding service tax under the category of Business Auxiliary Service (BAS). CIT (A) also confirmed the demand under the said category. Assessee contended that the said show cause notice was liable to be set aside as it was vague and did not disclose reasons as to why the activities undertaken by it would cover under BAS. Further, it contended that it was obligatory for Revenue to specifically indicate in the show cause notice why the activities undertaken by assessee were covered under a particular clause of the definition of BAS. Held: It was found that the show cause notice was vague as apart from indicating the amount under various heads of 'miscellaneous income on technical fee', 'technical know-how', 'commission and income from seminar', it did not mention as to why the services provided by assessee would fall under BAS. It is well settled that show cause notice is the foundation on which the department has to build up its case and if the allegations in the show cause notice are not specific and on the contrary are vague and lack details, it would be sufficient to hold that the noticee was not given proper opportunity to meet the allegations. Therefore, as the show cause notice was vague and lacked details, the impugned order based on such show cause notice was bad in law and could not be sustained.