2008 (7) TMI 72 - AT - Service Tax

Goods Transport Operators Service availed during the period 16.11.1997 to 1.6.1998 non-payment of tax - In view of the provisions introduced as Section 71A vide Finance Act, 2003, tax is payable for the services received from 16.11.1997 to 1.6.1998 but tax was not paid after retrospective amendment - sufficient cause exists to sustain the impugned order as regards the penalties imposed on the respondents

Summary

Issues:
1. Liability of service tax on Goods Transport Operators' Service availed between 16.11.1997 to 1.6.1998.
2. Applicability of provisions introduced under Section 71A of Finance Act, 2003.
3. Imposition of penalties under various sections of the Act.
4. Discretion to waive penalties under Section 80 of the Act.

Analysis:
1. The appellants availed Goods Transport Operators' Service during a specific period but failed to pay the service tax due on the services. The Finance Act, 2003 mandated assessees like the appellants to settle dues within six months of the President's assent to the Act, which was received on 14.5.2003. The original authority initiated proceedings to recover the tax and impose penalties. The Commissioner (Appeals) vacated the demand and penalties based on a Supreme Court decision. The Revenue appealed this decision.

2. The main contention of the Revenue was the introduction of Section 71A under the Finance Act, 2003. This provision exempted certain persons from the usual tax return filing requirements and mandated payment within six months of 14.5.2003. The Revenue argued that the respondents were obligated to pay the outstanding tax amount within the specified time frame, failing which penalties were justified. The Revenue believed that the original authority's order was lawful under the new provisions.

3. The consultant for the respondents acknowledged the tax liability but argued that there was uncertainty regarding the liability for availing the service. The consultant sought to waive penalties under Section 80 of the Act, citing sufficient cause for leniency.

4. The Tribunal considered both parties' arguments and acknowledged the legal tax liability on the respondents. However, the Tribunal noted that the Commissioner (Appeals) had previously ruled in favor of the respondents regarding the tax and penalties. Consequently, the Tribunal found sufficient cause to uphold the decision regarding penalties imposed on the respondents. The appeal by the Revenue was partially allowed concerning the service tax demand but dismissed regarding penalties. The Tribunal exercised discretion in sustaining the penalties imposed on the respondents, ultimately disposing of the appeal.