2007 (4) TMI 230 - AT - Service Tax

Whether the revenue could issue SCN under Section 73 of the Finance Act, 1994 for the recovery of Service Tax not paid during the period 16.11.97 to 1.6.98 in respect of goods transport service - such recovery is not permissible in terms of the amendments to Section 73 under Finance Act 2003 held that notice under Section 73 could not have been resorted to by the Revenue for the purpose of recovery of tax not paid during the material period assessee s appeal allowed

Summary

Issues:
- Whether the revenue could issue show-cause notice under Section 73 of the Finance Act, 1994 for the recovery of Service Tax not paid during a specific period in relation to goods transport service.

Analysis:
The issue in these appeals revolved around the permissibility of the revenue issuing show-cause notices under Section 73 of the Finance Act, 1994 for the recovery of Service Tax not paid during a particular period concerning goods transport service. The contention put forth by the ld. Counsel for the appellants was that a similar issue had been addressed by the Tribunal previously in the case of L.H. Sugar Factories Ltd. Vs. Commissioner of Central Excise, Meerut, where it was held that such recovery was not permissible, even after the amendments to Section 73 under the Finance Act 2003. Additionally, it was highlighted that the Revenue's appeal against this decision was dismissed by the Hon'ble Supreme Court, indicating that the issue was settled. On the contrary, the ld. SDR argued that the judgments in the case of Gujarat Ambuja Cements Ltd. Vs. Union of India and J.K. Industries Ltd. Vs. CCE, Indore suggested a different interpretation, emphasizing the Tribunal's misinterpretation in the L.H. Sugar case. However, the Tribunal referenced the Supreme Court's ruling in the L.H. Sugar case, affirming that show-cause notices under Section 73 were not maintainable for the appellants, as they were not liable to file returns under Section 70, as per the provisions of the Finance Act.

The Tribunal's decision was based on the fact that the amended Section 73 only applied to assesses obligated to file returns under Section 70, which was not the case for the appellants as their liability to file returns fell under Section 71A. Consequently, the notices issued under Section 73 were deemed not maintainable. The Tribunal agreed with this conclusion, dismissing the appeals and ruling in favor of the appellants. The judgment emphasized that the notice under Section 73 could not have been utilized by the Revenue for recovering unpaid taxes during the specified period. This decision was deemed crucial in resolving the disputes raised in the appeals and was mandated to be adhered to by all subordinate courts and tribunals. As a result, the appeals were allowed, granting consequential relief to the appellants in light of the judgment's findings.