2007 (4) TMI 151 - AT - Service Tax

Cenvat credit - Appellant is a manufacture paid service tax in respect to the transport of material to the factory - question arises whether appellant entitle to use service tax to paid service tax on the tax payable on subsequent transport - tribunal allow the appeal

Summary

Issues:
1. Whether the services rendered by the appellants fall under the category of Customs House Agent (CHA) for the purpose of Service Tax liability.
2. Whether the retrospective invocation of a larger period for Service Tax payment is justified.
3. Whether the earlier favorable decision in the appellant's case bars the subsequent proceedings.

Analysis:
1. The appellants argued that the services they provided, such as transportation, cargo handling, and re-transportation, do not come under the definition of CHA services. They contended that these services were not covered under the Service Tax net during the relevant period and were later categorized under 'Aircraft Operator.' The revenue, on the other hand, claimed that the services rendered by the appellants for air and sea imports and exports do fall under the CHA category, citing Circular No. B43/1/97-TRU. The dispute centered on whether the activities of the appellants should be considered as CHA services for Service Tax purposes.

2. The appellant's counsel argued against the retrospective invocation of a larger period for Service Tax payment, emphasizing that air and sea transport activities cannot be brought under the CHA ambit. They highlighted a previous show cause notice and subsequent Order-in-Appeal where the demands were set aside, asserting that invoking a larger period would be time-barred due to the earlier favorable decision. The counsel relied on the Supreme Court judgment in Nizam Sugar Factory v. CCE to support their argument against the retrospective levy of Service Tax.

3. The records revealed that an interim stay was granted in favor of the appellants during the proceedings. The revenue filed a cross objection justifying the levy of Service Tax on the appellants' services under the CHA category. However, the issue of time-bar regarding the retrospective invocation of a larger period was not adequately addressed in the cross objection. The appellants maintained that the earlier favorable decision and the Apex Court judgment should prevent the revenue from invoking a larger period for Service Tax payment. As a result, the appellants requested a full waiver of the pre-deposit amount and a stay on recovery until the appeal's disposal, which was accepted by the Tribunal for a final hearing on a specified date.