2004 (7) TMI 8 - AT - Service Tax

Service Tax Goods Transport Operators (1) Receiving services of goods transport operators, such services not liable to service tax (2) Demand

Summary

Issues:
Service tax liability of the appellants as recipients of services provided by a transport company for the period 16-11-1997 to 1-6-1998.

Analysis:
The appeal was filed against the impugned order-in-appeal, concerning the service tax liability of the appellants for the mentioned period. Both lower authorities confirmed a service tax amount of Rs. 2,95,493 on the appellants, citing Sections 70 and 73 of the Finance Act, 1994 as amended by the Finance Act, 2003.

The appellants argued that their case aligns with a Division Bench judgment in the case of L.H. Sugar Factories Ltd. v. CCE, Meerut-II, stating that recipients of taxable services from transport operators are not covered by Sections 70 and 73 pre-amendment, and post-amendment are liable under Section 71A. This judgment was also followed in the case of M/s. Shree Shankar Sahakari Sakhar Karkhana Ltd. v. CCE, Pune-III.

The JDR supported the impugned order's correctness. After hearing both sides and reviewing the record, it was established that the appellants, engaged in manufacturing excisable goods, utilized the services of transport operators. The Division Bench judgments were deemed applicable to their case, indicating they are not covered by Sections 70 and 73 for service tax liability. Consequently, the impugned order confirming the service tax was set aside.

The appeal was allowed in favor of the appellants, with any consequential relief as permissible under the law.