2006 (8) TMI 622 - AT - Service Tax

Summary

Issues:
1. Retrospective amendment of the Finance Act, 2000 affecting Goods Transport Operators.
2. Validity of demands in light of show-cause notice issuance.

Analysis:
1. The judgment dealt with the retrospective inclusion of 'Goods Transport Operators' under the service tax net as per the proviso to section 68 of the Finance Act, 2000. The appellants argued that demands were not sustainable as the show-cause notice was issued after the retrospective amendment. Citing the case of Laghu Udyog Bharati v. Union of India, the Apex Court's stance on retrospective amendments was highlighted. Additionally, the Tribunal's decision in L.H. Sugar Factories Ltd. v. CCE was referenced, affirming that demands cannot be confirmed without a pre-amendment show-cause notice. The Tribunal acknowledged the legal position and allowed the appeal and stay application based on the timing of the show-cause notice post-amendment.

2. The Tribunal considered the arguments presented by both sides and reviewed the records. It was noted that the show-cause notice in this case was issued on 12-1-2004, well after the retrospective amendment to the Finance Act had been implemented, bringing the category of 'Goods Transport Operators' under the service tax net. Consequently, the Tribunal found in favor of the appellants, emphasizing the importance of the timing of the show-cause notice issuance in determining the validity of the demands. As a result, the stay application and the appeal were allowed based on the retrospective nature of the amendment and its impact on the demands raised.