2002 (9) TMI 887 - AT - Service Tax

Summary

Issues:
Delay in filing appeals, stay applications for waiver of pre-deposit, retrospective amendment of Service Tax Rules, recovery of service tax, validity of Rule 2(d)(xvii) of Service Tax Rules, 1944, limitation period for demands, recovery of interest and penalty.

Delay in filing appeals:
The delay in filing the appeals by two companies is condoned due to the explanation provided that time was needed to collect details from goods transport operators to work out their tax liability. The same explanation was accepted by the Tribunal in a previous case.

Stay applications for waiver of pre-deposit:
The applications for waiver of pre-deposit arise from Orders-in-Appeal directing the applicants to pay service tax for goods transport operators' services during a specific period. The notices proposed recovery of interest and penal action under relevant sections of the Finance Act, 1994.

Retrospective amendment of Service Tax Rules:
The Commissioner directed the applicants to pay service tax on the gross amount of transport charges paid to goods transport operators based on a retrospective amendment validating the Service Tax Rules. The applicants sought waiver of pre-deposit and stay of recovery.

Recovery of service tax and validity of Rule 2(d)(xvii):
The contention is raised that the validation Act does not empower the department to recover service tax during the disputed period. The argument is supported by citing Article 265 of the Constitution of India and relevant case law.

Limitation period for demands:
The applicants argue that the demands are barred by limitation as they were issued beyond the prescribed period. They claim no liability to file a return and obtain registration for availing goods transport services.

Recovery of interest and penalty:
The notices proposed recovery of interest and penalty, which the applicants argue should not be imposed if the tax itself is not payable. The opposition contends that the validation provisions allow for the recovery of service tax.

Final Decision:
The Tribunal finds that the issue of whether the Finance Act empowers demands and collection of service tax from those availing goods transport services cannot be determined at an interim stage. The notices did not call for showing cause against recovery and collection of service tax, leading to a waiver of pre-deposit and stay of recovery pending further hearings.