2011 (2) TMI 878 - AT - Service Tax

Show Cause Notice - The SCN was issued and after amendment of the provisions of service tax, the notice was not revised nor the fresh notice was issued - Held that - demands against the assessee are not sustainable. When there is no demand, the question of imposing penalty does not arise. decided in favour of Assessee.

Summary

Issues:
1. Service tax demand for goods transport operators service
2. Dropping of penalty against the assessee
3. Validity of show cause notice issuance

Analysis:
1. The appeal was filed by the assessee against the service tax demand for goods transport operators service, while the Revenue filed an appeal against the dropping of penalty against the assessee. The show cause notice was issued regarding the demand of service tax, and the assessee contended that the levy of tax was set aside by the Supreme Court in a previous case. The relevant provisions were amended retrospectively, but no fresh show cause notice was issued to the appellants.

2. The assessee relied on various decisions to support their case, including Union of India vs. Shri Mahesh Granites Pvt. Ltd. and CCE vs. Eimco Elecon Ltd. On the other hand, the Department reiterated the impugned order and argued for the imposition of a penalty on the assessee. The Tribunal considered the arguments presented by both sides.

3. The Tribunal found that the show cause notice was issued before the relevant provisions of service tax were amended, and after the amendment, no revised notice was issued. The Tribunal referred to a case where it was held that the Show Cause Notice under Section 73 is not maintainable in certain cases. The issue of liability to pay tax and other matters were not required to be decided in the present case.

4. The Tribunal, after considering the arguments and perusing the impugned judgment, concluded that the demands against the assessee were not sustainable in light of previous decisions. It was established that the Show Cause Notice under Section 73 cannot be issued by the Department in such cases. Consequently, the appeals were allowed in favor of the assessee, and the Revenue's appeal was rejected.

5. In summary, the Tribunal allowed the assessee's appeal and rejected the Revenue's appeal, emphasizing that the demands against the assessee were not sustainable due to the invalidity of the show cause notice issuance in the context of the relevant legal provisions and previous judicial decisions.