2008 (4) TMI 78 - AT - Service Tax

Refund - whether the service tax liability on a recipient of C/F Agents Service, in terms of Section 116, is limited to the period from 16.7.97 to 15.10.98 as claimed by the appellants - where Section 116 did not enable the Revenue to collect Service tax from recipient for services received during July-Aug-99, the Revenue cannot rely on procedural provisions of Section 117 to fasten Service tax liability on such recipient for any period beyond 16-10-1998 assessee s appeal allowed

Summary

Issues:
Service tax liability on Clearing & Forwarding Agents Service post-legislative changes.

Analysis:
The case involves a dispute regarding the service tax liability of a recipient of Clearing & Forwarding Agents Service following legislative changes. The appellants initially paid service tax for the period 16.7.97 to 31.7.99, which was refunded after certain provisions were struck down by the Supreme Court. Subsequently, the Finance Act, 2000 revalidated the provisions and the appellants repaid a portion of the tax. The Commissioner later ordered recovery of service tax for a specific period, leading to the present appeal against the revisional order.

The key issue to be determined is whether the service tax liability on the recipient is limited to a specific period as claimed by the appellants. The Tribunal referred to previous judgments, including Commissioner Vs DCW Ltd. and Commissioner Vs Orient Cements, which supported the appellants' position. The Tribunal highlighted that Section 116 of the Finance Act, 2000 retrospectively made recipients liable for service tax for a specified period and that the Revenue cannot collect tax beyond the period stipulated by Parliament. The Tribunal emphasized that procedural provisions do not alter substantive provisions and rejected the Revenue's arguments based on amendments to the Service Tax Rules post the specified period.

Based on the cited case law and legal principles, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellants. The decision was pronounced in open court on 23.4.2008. The judgment provides clarity on the interpretation of legislative provisions regarding service tax liability on Clearing & Forwarding Agents Service, emphasizing the limitations on the Revenue's authority to collect tax beyond the period specified by Parliament.