2014 (4) TMI 1041 - AT - Service Tax

Demand of service tax - Held that - demands issued in the year 2002 for the period 16.11.97 to 1.6.98 are barred by limitation. Apart from the fact that original adjudicating authority has himself not imposed any penalty on the respondents on the ground of absence of any suppression or mis-statement, there are various decisions of the Tribunal as upheld by the High Court, laying down that in such a scenario, the extended period of limitation cannot be invoked. It may be seen that there were number of cases involving more or less identical period till 1.6.98 when the show cause notices were issued after the retrospective amendment. In all such cases, the Tribunal held that no malafide can be attributed to the assessee and the show cause notices are barred by limitation. One such reference can be made to Hon ble Gujarat High Court decision in the case of CCE Vadodara vs. Eimco Elecon Ltd. 2010 (7) TMI 477 - GUJARAT HIGH COURT wherein the appeal filed by the Revenue was rejected on merits, as well as on limitation. The Tribunal s decision in the case of CCE Raipur vs. Jaiswal Equipment & Holdings P Ltd. 2007 (6) TMI 31 - CESTAT, NEW DELHI can also be referred - Decided against Revenue.

Summary

Issues:
1. Interpretation of provisions of Service Tax Rules, 1994 regarding liability to pay service tax on goods transport operator services.
2. Validity of retrospective amendments in Finance Act 2000 and 2003.
3. Application of the extended period of limitation for issuing show cause notices.
4. Assessment of penalties based on suppression or misstatement.
5. Precedent decisions by Tribunal and High Courts regarding liability to pay service tax and limitation periods.

Analysis:

1. The judgment addressed the issue of liability to pay service tax on goods transport operator services. The Supreme Court had struck down certain provisions, but subsequent retrospective amendments made recipients liable for payment. The Tribunal and High Court decisions clarified that recipients were not required to file returns under certain sections and were not liable to pay tax, leading to the rejection of Revenue's appeals.

2. The retrospective amendments in Finance Act 2000 and 2003 were challenged for validity. However, the Supreme Court upheld these amendments in a separate case involving Gujarat Ambuja Cement Ltd. The present case did not challenge the validity of these amendments, distinguishing it from the Gujarat Ambuja case.

3. The issue of the extended period of limitation for issuing show cause notices was crucial. The Tribunal and High Courts consistently held that in cases where no malafide intent was found and no penalties were imposed, the extended period of limitation could not be invoked. Several cases supported this stance, emphasizing that show cause notices issued after the retrospective amendment and involving similar periods were barred by limitation.

4. The assessment of penalties hinged on the absence of suppression or misstatement by the respondents. The original adjudicating authority did not impose penalties on this basis, aligning with the Tribunal's decisions that no malafide intent could be attributed to the assessee, further supporting the rejection of Revenue's appeals.

5. The judgment extensively referenced precedent decisions by various courts, including the Tribunal and High Courts, to establish a settled legal position. These decisions consistently upheld that recipients were not liable to pay service tax under certain sections and that show cause notices issued after the retrospective amendment and involving specific periods were barred by limitation. The comprehensive analysis of these precedents formed the basis for rejecting the Revenue's appeals.

In conclusion, the judgment provided a detailed analysis of the issues surrounding liability for service tax, retrospective amendments, limitation periods, penalties, and the application of legal precedents. It upheld the decisions of lower authorities and courts, emphasizing the settled legal position and lack of merit in the Revenue's appeals.