2011 (6) TMI 52 - AT - Service Tax

Demand and penalty - abetment 60% - benefit of exemption Notification No. 39/1997 read with Notification 02/2004 - Take into consideration the additional submissions filed by the learned Chartered Accountant, referring to a Notification No. 20/2009-ST dated 07.07.2009, which has been given retrospective effect from 01.04.2000, vide Section 75 of the Finance Act, 2011. Inasmuch as the said plea of the appellant is legal plea, we allow them to raise the same - Further, note that the said notification was not before the Commissioner, when he passed the impugned order, deem it fit to set-aside the impugned order and remand the matter to Commissioner for considering the effect of the said notification, which has been given retrospective effect and in terms of the provisions of Section 75 of the Finance Act, 2011, the refund of service tax - Stay petition as also appeal get disposed off in above manner.

Summary

Issues:
1. Benefit of abetment under Notification No. 39/1997 and Notification 02/2004.
2. Entitlement to benefit of abetment due to reversal of availed credit.
3. Review of Additional Commissioner's order by the Commissioner.
4. Imposition of penalty under Section 76 of the Finance Act, 1994.
5. Consideration of Notification No. 20/2009-ST with retrospective effect.

Analysis:
1. The appellant, engaged in providing services as a Tour Operator, availed the benefit of abetment under Notification No. 39/1997 and Notification 02/2004, which provided for a 60% abetment of the taxable value if no credit of any duty or service tax was availed. However, the Revenue contended that the appellant, despite holding a proper service tax registration, availed credit of Central Excise duty and education cess during the relevant period, leading to the initiation of proceedings against them via a show cause notice.

2. The Additional Commissioner adjudicated the show cause notice and dropped the proceedings, citing that the appellant had reversed the credit before the issuance of the notice, effectively nullifying the availed credit. This decision was supported by referencing the Supreme Court judgment in the case of Chandrapur Magnet Wires Pvt. Limited vs. CCE Nagpur 1996 (81) ELT 3 (SC) and other Tribunal decisions.

3. Subsequently, the Commissioner reviewed the Additional Commissioner's order and passed an impugned order confirming a demand for service tax and imposing a penalty under Section 76 of the Finance Act, 1994. The appellant challenged this order before the Appellate Tribunal.

4. The Appellate Tribunal noted that the issue was prima facie covered by the Supreme Court decision in the Chandrapur Magnet Wires case, entitling the appellant to unconditional stay. As a result, the Tribunal ordered accordingly.

5. Additionally, the Tribunal considered the appellant's submission regarding Notification No. 20/2009-ST, which had retrospective effect from 01.04.2000 under Section 75 of the Finance Act, 2011. Since this notification was not before the Commissioner when the impugned order was passed, the Tribunal set aside the order and remanded the matter to the Commissioner for reassessment in light of the retrospective notification. The Tribunal emphasized the requirement for the refund of service tax paid to all service providers falling under the relevant category as per the notification. The stay petition and appeal were disposed of accordingly.