2002 (4) TMI 5 - AT - Service Tax

Service Tax Goods Transport Operators (1) Vires of the Governments action (2) Demand and Recovery (3) Limitation

Summary

Issues:
1. Retrospective effect of amendment on service tax recovery
2. Applicability of Section 11A of the Central Excise Act to service tax recovery
3. Competency of Deputy Commissioner to review refund order
4. Time bar under Section 117 of the Finance Act for recovery

Analysis:

1. The first issue revolves around the retrospective effect of the amendment on service tax recovery. The appellants filed a refund claim after a judgment by the Apex Court struck down certain rules. However, the Central Government later amended the rules with retrospective effect. The Tribunal held that the vires of the retrospective amendment cannot be questioned and that the appellants became liable to pay service tax post-amendment. Therefore, the recovery of the refunded amount was deemed valid.

2. The second issue concerns the applicability of Section 11A of the Central Excise Act to service tax recovery. The appellants argued that no show cause notice could be issued under Section 11A. However, the Tribunal ruled that Section 83 of the Service Tax Act specifies the applicable sections of the Central Excise Act, and the absence of Section 11A therein does not benefit the appellants. The Deputy Commissioner was deemed competent to issue the notice for service tax recovery.

3. The third issue addresses the competency of the Deputy Commissioner to review the refund order. The appellants contended that the earlier order sanctioning the refund could not be reopened. The Tribunal clarified that the Deputy Commissioner did not review the order but merely requested the appellants to pay service tax post-amendment. The Tribunal distinguished this situation from cases where officials are not empowered to review their own orders.

4. The final issue pertains to the time bar under Section 117 of the Finance Act for recovery. The appellants argued that the recovery was time-barred. However, the Tribunal noted that the recovery was initiated before the refund was actually paid to the appellants, thus not falling under the time bar provision. Consequently, the recovery of service tax was deemed valid.

In conclusion, the Tribunal found no merit in the appeals and dismissed them, upholding the demand for service tax from the appellants based on the retrospective amendment and legal provisions applicable to the case.