The company is taking "appropriate action" to represent its case before the authority.
"The company has received a demand-cum-showcause notice of Rs 8.62 lakh from the Service Tax Department asking the company to represent before the department and provide clarification," it said in a BSE filing.
Meanwhile, its share trading has also been suspended due to penal reasons.
Continental Chemicals started its manufacturing activity in 1985 and started its software development business in 1998, its website showed.