By TIOL News Service

MUMBAI, SEPT 28, 2015: THE adjudicating authority held that the appellant's activity of supplying scaffolding on rental basis would amount to rendering of services under "Maintenance and Repair Service".

The first appellate authority has allowed the appeal in part by holding that for the period 2004-05 to 15.05.08 the activity of supplying scaffold will not fall under the category of 'maintenance or repair service' and coming to such conclusion he dropped the demands confirmed by the adjudicating authority.

However, the Commissioner (A) vide the impugned order confirmed the demand of service tax and interest thereon from 16.05.2008 to 31.3.2009 under the category of "Supply of Tangible Goods" service for the same activity under Section 65(105) (zzzj) for the Finance Act, 1994.

Revenue is not in appeal against the dropping of tax demand for the prior period, interest thereof and the penalties.

Nonetheless, the appellant is before the CESTAT against this 'unscaffolded' order.

The Bench considered the submissions and observed -

"5. We find strong force in the contentions raised by the learned Consultant that the show-cause notice and the order-in-original proceeded for confirmation of demands on the appellant on the ground that they have rendered services of "maintenance or repair" for the period 16.05.2008 to 31.03.2009. There was no proposal for clarification of the services rendered by the appellant under the category of "supply of tangible goods". In our considered view the first appellate authority has gone beyond the allegations made in the show-cause notice by upholding the demand under the category of "supply of tangible goods" service. It is a settled law that the appellate authority gone beyond the allegation made in the show-cause notice. In our view, the impugned order to that extent it confirms the service tax liability from 16.5.2008 under the category of "supply of tangible goods" service is unsustainable as traversing beyond the allegation made in the show-cause notice. The appeal to that extent as filed by the assessee is allowed and the impugned order to that extent which is challenged before us is set aside."

In fine, the appeal was allowed.

In passing: Perhaps, this may leave the Revenue flummoxed…for A bird in hand is worth two in the bush!

(See 2015-TIOL-2042-CESTAT-MUM)