2004 (11) TMI 577 - AT - Service Tax

Summary

Issues:
Service Tax liability on "goods transport service" received by the appellants during a specific period, applicability of the Finance Act, 2000 amendments, and the limitation period under Section 73 of the Finance Act, 1994.

Analysis:

1. Service Tax Liability:
The main issue in the appeals was whether the appellants were liable for Service Tax as service-receivers during the relevant period. The appellants argued that the demands of Service Tax were not valid as they were raised after the Finance Act, 2000 amendments. They relied on the Supreme Court's ruling in Laghu Udyog Bharati v. UOI and the limitation period under Section 73 of the Finance Act, 1994. The bench noted that the demands were raised beyond the prescribed limitation period and were not affected by the amendments made by Parliament. The appellants were recipients of taxable services, and the rules for recovering Service Tax from service recipients were held ultra vires by the Supreme Court.

2. Applicability of Finance Act, 2000 Amendments:
The bench referred to a previous decision in CCE, Chennai v. EID Parry (India) Ltd., which had a similar issue against the Revenue. The decision highlighted the amendments made by Parliament to Section 65 of the Finance Act, 1994, under Section 116 of the Finance Act, 2000. These amendments defined recipients of "Goods Transport" service as "assessees" for a limited period and deemed actions taken during that period as valid. However, the demands in the present case were raised after the relevant amendments and were beyond the scope of the legislative changes.

3. Limitation Period under Section 73 of the Finance Act, 1994:
The bench emphasized that the demands of Service Tax in the show cause notices were issued beyond the limitation period prescribed under Section 73 of the Finance Act, 1994. As such, the demands were considered invalid and not enforceable against the appellants. The legal opinion provided by the Additional Legal Advisor to the Government of India supported the position that Service Tax could not be recovered for the period covered by the amendment if no action was initiated during that time.

4. Final Decision:
Based on the analysis and precedent set in CCE, Chennai v. EID Parry (India) Ltd., the bench set aside the impugned order and allowed the appeals of the appellants. The decision granted consequential relief to the appellants, considering the invalidity of the demands raised by the Department. The judgment was dictated and pronounced in open court, providing a clear resolution to the issues raised in the appeals.