Service Tax

I TRIBUNAL

Order beyond the scope of SCN is legally unsustainable. The conclusion based on assumptions and conjectures cannot deprive the assessee of the credit.

FACTS Appellant provided logistics services including transportation of goods. Of the two issues involved in the show cause notice (SCN), the first related to RCM liability under Goods Transport Agency (GTA) service for payments made to suppliers of lorries on hire, based on expenses booked in financial statements as “freight charges”. The appellant contended that the supplier had not issued a consignment note and hence legally, it was not liable to pay service tax. However, the adjudicating authority proceeded by examining the nature of income of the appellant for providing output transportation services and observed that by avoiding issuing consignment notes for rendering output services, it could not avoid service tax liability as the appellant earned freight income and based on the said observation, service tax on GTA service was confirmed. For this conclusion, the appellant’s submission was that besides traveling beyond allegation in the SCN, which is the foundation of the levy and recovery, service tax liability could not be fastened when SCN did not contain allegations for liability on o