Intertek Testing Services India Ltd. Vs Commissioner of CGST (CESTAT Mumbai)
The dispute concerned the classification of the appellant’s Social Compliance Audit services for the purpose of service tax. The department had issued a show cause notice proposing classification of the services under Business Auxiliary Service as defined under Section 65(19) of the Finance Act, 1994, and sought recovery of service tax. The adjudicating authority confirmed the demand, and the appellant challenged the order before the Commissioner (Appeals).
The Commissioner (Appeals) examined the nature of the services and concluded that they did not fall within the taxable category of Business Auxiliary Service. The appellate authority relied on an earlier Tribunal decision and held that the activities undertaken by the appellant were not covered by the relevant clauses of Section 65(19). However, despite rejecting the classification proposed in the show cause notice, the Commissioner (Appeals) sustained the service tax demand by classifying the services under a different taxable category, namely Business Support Service.
The appellant contended before the Tribunal that the show cause notice had never proposed classification under Business Support Service. Therefore, confirmation of the demand under a completely new taxable entry at the appellate stage was beyond the scope of the proceedings and legally unsustainable.
