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2014 (4) TMI 291 - HC - Service TaxDemand of service tax - Demand u/s 68 or 73 - Held that - The provision prevailing prior to 10.09.2004 was providing for value of taxable services escaping assessment, while after its substitution vide Finance Act, 2004, it provided for recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded. Admittedly, on the date of show cause notice i.e., 06.10.2004, the provisions contained in Section 73(1 )( a) of the said Act, prevailing prior to 10.09.2004, were not in existence. - statutory provision under which the show cause notice issued was not in existence as on that date - Tribunal order cannot be interfered - Decided against Revenue.
Issues:
1. Validity of Central Excise Appeal against the Tribunal's order dated 20.10.2010. 2. Interpretation of the provision pre and post-amendment in the context of the show cause notice issued on 06.10.2004. 3. Application of Section 73(1)(a) of the Finance Act, 1994, and its substitution by the Finance Act, 2004. 4. Tribunal's decision based on the non-existence of the statutory provision at the time of issuing the show cause notice. Issue 1: Validity of Central Excise Appeal The High Court dealt with a Central Excise Appeal challenging the Tribunal's order dated 20.10.2010, which set aside the Commissioner of Service Tax, Bangalore's order-in-original from 19.09.2006. The appeal questioned the initiation of proceedings prior to an amendment and its impact on the validity post-amendment. Issue 2: Interpretation of Pre and Post-Amendment Provision The Court analyzed the show cause notice issued on 06.10.2004, concerning service tax for security services rendered between 16th October 1998 to 31st March 2004. The question of whether proceedings initiated pre-amendment were affected post-amendment was crucial. The provision under scrutiny was Section 73(1)(a) of the Finance Act, 1994, which underwent a significant change through the Finance Act, 2004. Issue 3: Application of Section 73(1)(a) and its Substitution Section 73(1)(a) of the Act was substituted by the Finance Act, 2004, effective from 10.09.2004. The original provision dealt with the value of taxable services escaping assessment, while the amended version focused on recovery of service tax not levied, paid, short-levied, short-paid, or erroneously refunded. The show cause notice issued on 06.10.2004 invoked the provision pre-amendment, which was not in existence at that time. Issue 4: Tribunal's Decision based on Non-Existence of Statutory Provision The Tribunal's decision was based on the non-existence of the statutory provision under which the show cause notice was issued when it was served. The provision in force on 06.10.2004 was inserted by the Finance Act, 2004, effective from 10.09.2004. The Court upheld the Tribunal's decision, stating that the appeal lacked merit due to the absence of the relevant statutory provision at the time of issuing the notice. In conclusion, the High Court dismissed the Central Excise Appeal, affirming the Tribunal's decision regarding the non-viability of the proceedings initiated under a statutory provision that was not in force at the time of issuance. The judgment highlighted the significance of aligning legal actions with the prevailing statutory framework and upheld the principle of lawfulness in administrative proceedings.
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