2018 (11) TMI 1222 – CESTAT CHENNAI – TMI – Validity of SCN – grounds raised in SCN not clear – Liability of service tax – Appellants were receiving and providing IUC services from Sri Lanka Telecom, a service provider situated outside India – reverse charge mechanism – Held that:- The show cause notice has not specified the category of service falling under any of the sub-clause to Section 105 of the Finance Act, 1994 under which the demand of service tax has been proposed. It is well settled that lack of such clarity in the show cause notice and omission to indicate the specific category of service under which the tax is proposed to be demanded will vitiate the proceedings ab initio.
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The circulars dated 15.7.2011 and 19.12.2011 are very much applicable pari materia to IUC charges paid by the appellant to Sri Lanka Telecom, where it has been reiterated that when the service provider is located abroad, he is not covered under the definition under Section 65(105). Hence, the serv
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such services to provide their output service. Department took the view that the appellants were required to pay service tax on the charges collected for the IUC services received from Sri Lanka Telecom. Accordingly, a show cause notice was issued inter alia proposing to demand service tax liability of ₹ 2,03,90,782/- along with interest as also for imposition of penalty under various provisions of law. In adjudication, the Commissioner vide impugned order dated 18.10.2011, confirmed the proposed demand along with interest and also imposed equal penalty under section 78 of the Finance Act, 1994. Hence this appeal. 2. Today, when the matter came up for hearing, on behalf of the appellant, ld. counsel Ms. G. Vardhini Karthik made a number of submissions which can be summarized as under:- 2.1 The show cause notice while proposing the demand of service tax has not indicated as to the category of service provided or received by the appellant and which become liable to discharge servi
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Leased Circuits charges, where it has been reiterated that when the service provider is located abroad, he is not covered under the definition under Section 65(105). Hence, the service provided by foreign vendors cannot be taxed under Telecommunication Service. 3. On the other hand, ld. AR Shri S. Govindarajan supports the impugned order. 3.1 He also draws our attention to Circular 91/2/2007-ST dated 12.3.2007 wherein it has been indicated that ICU charges have been incorporated into the definition of telecommunication service vide the amendment proposed in the Finance Bill, 2007. 4. Heard both sides. 5. In the first place, we find that the ld. counsel is correct in her assertion that the show cause notice has not specified the category of service falling under any of the sub-clause to Section 105 of the Finance Act, 1994 under which the demand of service tax has been proposed. It is well settled that lack of such clarity in the show cause notice and omission to indicate the specific
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