2014 (11) TMI 84 - AT - Service Tax

Goods Transport Agency services - Imposition of penalty - Held that - demand was made by issuing a show cause notice in the year 2007 i.e. after retrospective amendment. At the time of retrospective amendment, no proceedings were pending against the appellant in respect of Service Tax. - Decision of The Hon ble High Court of Gujarat in the case of Eimco Elecon Ltd (2010 (7) TMI 477 - GUJARAT HIGH COURT) followed - Decided in favour of assessee.

Summary

Issues:
Appeal against demand of Service Tax for the period 16-11-1997 to 2-6-1998 based on a show cause notice issued in 2007, reliance on High Court decisions, retrospective amendment, liability on service recipient, Larger Bench decision, sustainability of demand.

Analysis:
The appellant filed an appeal against the demand of Service Tax as a recipient of Goods Transport Agency services for a specific period, based on a show cause notice issued in 2007. The adjudicating authority confirmed the demand and penalties. The appellant relied on various High Court decisions to support their contention that the demand was not sustainable due to a retrospective amendment. The appellant argued that there was no demand raised under the earlier provisions of Service Tax, which were later held ultra vires by the Supreme Court. The show cause notice was issued post-retrospective amendment, making the demand questionable according to the appellant.

The Revenue, on the other hand, relied on a decision of the Larger Bench of the Tribunal in a different case. It was noted that the High Court decisions cited by the appellant came after the Larger Bench decision. The Tribunal found that the demand in the present case was made through a show cause notice in 2007, following a retrospective amendment. Importantly, at the time of the retrospective amendment, there were no pending proceedings against the appellant regarding Service Tax.

The Tribunal referenced a specific judgment of the High Court of Gujarat in a related case, which highlighted the evolution of the liability to pay Service Tax on the service recipient. The High Court's decision emphasized the statutory clarity required to hold an assessee accountable for any default in such cases. The Tribunal, in line with the High Court decisions cited by the appellant, set aside the impugned order and allowed the appeal. The judgment underscores the significance of statutory provisions and retrospective amendments in determining the sustainability of demands related to Service Tax.