2015 (10) TMI 1304 - AT - Service Tax

Relevant date of issuance of SCN - Claim of refund of service tax paid since no SCN was issued - GTA - No SCN issued for recovery of service tax for the relevant period since the writ petition were pending before the HC - when WP was dismisssed, assessee paid the service tax on its own - Exclusion of period for issue of SCN - Held That - According to the provisions of Section 73(2b) Explanation where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of one year or five years, as the case may be. In this case, the stay was granted on 04/02/2004, the final decision rejecting the writ petition was rendered on 09/08/2005. If we calculate the period during which the writ petition was pending and there was a stay order, the show-cause notice issued by the Revenue has to be considered as having been issued within one year. Therefore the show-cause notice has to be considered as issued within the normal period of limitation. The tax paid by the appellant is in accordance with law and therefore the demand for service tax made by Revenue has to be upheld. Consequently the refund claim filed by the appellant and the rejection of the same also has to be upheld. - Decided against the assessee. Demand of Interest - Once service tax liability is upheld, interest liability is also upheld. Imposition of Penalty Revenue contended that imposition of penalty is perfectly in order and needs no interference Held That - Once the writ petition was dismissed; assessee paid the entire tax amount in the same month No delay on part of assessee Penalties are set aside.

Summary

Issues Involved:
1. Liability to pay service tax on GTA service received as a receiver of service.
2. Validity of show-cause notice for recovery, interest, and penalty.
3. Eligibility for a refund claim.
4. Sustainability of penalties imposed and the payment of interest.

Detailed Analysis:
1. The appellant, a manufacturer of cement and clinker, received goods transport operator (GTO) service and was liable to pay service tax on the same. The appeals were linked due to common issues. Amendments in the Finance Act, 1994, were made with retrospective effect, including provisions related to goods transport operators. The Hon'ble Supreme Court upheld the requirement for service receivers to file returns and pay taxes after the 2003 amendments.

2. The appellant challenged the provisions of the Finance Act, 2000, in a writ petition before the High Court. Despite a stay order, the High Court dismissed the petition, leading to a demand for service tax from the appellant. A show-cause notice was issued for recovery, interest, and penalties. The appellant filed returns, paid the tax, and a penalty was imposed post proceedings.

3. The appellant filed a refund claim, arguing against the absence of a show-cause notice for the service tax recovery period. The claim was rejected by the lower authorities, leading to appeal on the eligibility for a refund.

4. The issue of penalties and interest arose. The appellant's counsel argued against the imposition of penalties, citing the pendency of the writ petition and the subsequent payment of tax after its dismissal. The Tribunal considered the circumstances and set aside the penalties imposed on the appellant. However, the Tribunal upheld the demand for service tax and the rejection of the refund claim. Interest payment was mandated, and the appellant was given three months to pay the same.

This detailed analysis covers the liability to pay service tax, the validity of the show-cause notice, the eligibility for a refund claim, and the sustainability of penalties and interest payment as per the judgment delivered by the Appellate Tribunal CESTAT BANGALORE.