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Issues involved: Determination of time limitation for issuing a show cause notice for service tax liability u/s 73(1) of the Finance Act, 2003.
Summary: The appellant-Revenue questioned the justification of the CESTAT in holding the demand of duty to be time-barred despite the amendment in the Finance Act, 2003, making the recipient liable to pay service tax on services received from Goods Transport Operators. The respondent, a Limited Company engaged in manufacturing, received services for goods transportation during a specific period. The amendment in 2003 imposed the liability on the recipient to pay service tax. The show cause notice issued in May 2005 by the appellant-authority led to the respondent being held liable for service tax. The CESTAT, in its order, noted that the notice was issued after the retrospective amendment, raising the question of limitation. The appellant argued that the limitation period should be computed from the amended Act of 2003, making the notice timely. However, the Court found that the extended limitation period of five years applies only in cases of fraud, collusion, wilful misstatement, or contravention of provisions, which were not present in this case. The contention that the respondent became liable to pay service tax post the 2003 amendment overlooked that the services were received before the amendment. As the payment for services had already been made to the Transport Operators, it was not feasible to deduct tax and deposit it with the Union of India. The Tribunal's decision that the show cause notice was issued beyond the limitation period was upheld, leading to the dismissal of the appeal due to the absence of any substantial legal question.
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