2013 (10) TMI 1016 - AT - Service Tax

Reverse charge on Service received during the period 16/07/1997 to 31/08/1999 - Clearing and Forwarding Agency Service - Held that - In the first place if the appellant has received certain services from the CHA, we do not understand, how the said services can be construed as Clearing and Forwarding Agency Services . There is a separate entry for Custom House Agent Service which is distinct and different from Clearing and Forwarding Service . Secondly, the appellant is a recipient of the service. During the impugned period the appellant was not liable to file service tax return under Section 70 of the Finance Act, 1994 and the provisions of Finance Act, were amended vide Finance Act, 2003 when a separate Section 71A was inserted and the appellant became liable to file return only under Section 71A. In respect of the assesses who were required to file returns under Section 71A, Section 73 was amended under Finance Act, 2004 providing the demand of service tax from assessees who were required to file returns under Section 71A - Impugned order is not sustainable - Decided in favour of assessee.

Summary

Issues:
1. Classification of services received as 'Clearing and Forwarding Agency Services.'
2. Liability to pay service tax as a recipient of the service.
3. Requirement to file service tax return under Section 70 of the Finance Act, 1994.

Analysis:
1. The appeal challenged an Order-in-Appeal confirming a service tax demand against the appellant for services received from a Custom House Agent (CHA) classified as 'Clearing and Forwarding Agency Services.' The appellant contended that the services should not be classified as such. The Tribunal noted the distinction between 'Custom House Agent Service' and 'Clearing and Forwarding Service,' finding the classification erroneous.

2. The appellant argued that they were not liable to pay service tax as a recipient of the service during the impugned period, citing relevant case law. The Tribunal acknowledged that during the period in question, the appellant was not required to file a service tax return under Section 70 of the Finance Act, 1994. The appellant's liability to file a return was introduced by an amendment in the Finance Act, 2003 under Section 71A. The Tribunal found that the demand under Section 73 of the Finance Act was not sustainable in law given the appellant's status as a non-filer under Section 70.

3. Considering the submissions and legal provisions, the Tribunal held that the impugned order was not legally sustainable. Consequently, the order was set aside, and the appeal was allowed. The appellant was entitled to a refund of the pre-deposit amount made under the stay order without the need for a separate application. The decision was made based on the amendments in the Finance Act and the appellant's non-liability to file returns under Section 70 during the relevant period.