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Issues involved: The judgment involves the liability of assessees to pay service tax on goods transport operator's service (GTO service) for the period from 16.7.1997 to 2.6.1998, along with interest and penalties. The main issue is whether recipients of GTO service were liable to pay service tax under Section 68(1) of the Finance Act, 1994.
Details of the Judgment: 1. The assessees, engaged in manufacturing excisable products, availed GTO service for transporting materials to their factories during the disputed period but did not pay service tax on the freight. Show-cause notices were issued demanding service tax, interest, and penalties. The original authority confirmed the demands and imposed penalties. Appeals were filed by assessees to the Commissioner (Appeals), who upheld the orders in some cases and granted relief in others. The present appeals are by assessees and the Revenue against these decisions. 2. Written submissions styled as "cross objections" were presented by respondents in some cases. 3. The substantive issue revolves around conflicting decisions cited by both parties, with assessees relying on the Tribunal's decision in L.H. Sugar Factories case, affirmed by the Supreme Court, while the Revenue citing other cases for support. The issue is whether the assessees are liable to pay service tax based on the relevant provisions of the Finance Act, 1994. 4. The Tribunal's decision in L.H. Sugar Factories case held that show-cause notices issued to recipients of GTO service were not maintainable under Section 73 of the Finance Act, 1994. The apex court affirmed this decision, emphasizing the distinction between liability to file returns under Section 70 and Section 71A. 5. The assessees argue that the apex court's judgment supports their case, while the Revenue contends that a different view in Gujarat Ambuja Cements case should apply. The Tribunal finds that the legislative intent and historical context support the assessees' position based on the L.H. Sugar Factories decision. 6. Reviewing decisions in similar cases, the Tribunal notes that amendments to Section 73 of the Finance Act, 1994 post-2004 have an omnibus application to all assessees, unlike the situation before 2004. The Tribunal concludes that the Revenue's reliance on these amendments does not advance their case. 7. Corrections to show-cause notices made by the Revenue do not alter the fundamental requirement of invoking Section 73 for service tax recovery. The Tribunal rejects the argument to read Section 71A with Section 70 in Section 73, emphasizing the need for strict interpretation of statutory provisions. 8. The Tribunal holds that the issue is decided against the Revenue and in favor of the assessees based on the L.H. Sugar Factories decision, affirming that the assessees' appeals are allowed, and the Revenue's appeals are dismissed. Cross objections are also disposed of accordingly.
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