2008 (8) TMI 55 - AT - Service Tax

Recipient of GTO services - during the period from 16-11-1997 to 1-6-1998 SCN issued by invoking the extended period of limitation u/s 73 - Apex Court s decision in L.H. Sugar Factories Ltd., s case (supra) would govern the instant case and accordingly as rightly held by the Commissioner (Appeals) the assessee had no liability to pay service tax under section 73 - when the assessee s appeal stands allowed they are entitled to the consequential relief of refund

Summary

Issues:
1. Liability to pay service tax on Goods Transport Operators service received by the assessee from 16-11-1997 to 1-6-1998.
2. Rejection of refund claim by the Deputy Commissioner and subsequent appeal by the assessee.
3. Interpretation of retrospective amendments to the Finance Act, 1994 and applicability to the case.
4. Entitlement to consequential relief of refund post the decision on service tax liability.

Issue 1:
The case involved an appeal by the assessee against the revisional authority's decision holding them liable to pay service tax on freight charges paid to Goods Transport Operators (GTO) service from 16-11-1997 to 1-6-1998. The assessee contended that the retrospective amendments to the Finance Act, 1994 by the Finance Act, 2003 did not authorize the recovery of service tax beyond 12-5-2000. The Tribunal, considering previous decisions, held that the assessee was not liable to pay service tax under section 73 of the Finance Act, 1994 for the mentioned period, as the class of persons under section 71A was not brought under section 73. The Tribunal relied on the Supreme Court's decision in a similar case to support its ruling, ultimately allowing the assessee's appeal.

Issue 2:
The assessee had filed a refund claim based on a previous Tribunal decision, which was rejected by the Deputy Commissioner following the revisional authority's order. The assessee then appealed to the Commissioner (Appeals), who set aside the Deputy Commissioner's decision. The revenue appealed this decision. The Tribunal upheld the Commissioner (Appeals) ruling, stating that the assessee was entitled to the consequential relief of refund, citing relevant case law and the Apex Court's decision.

Issue 3:
The Tribunal analyzed the retrospective amendments to the Finance Act, 1994 by the Finance Act, 2000 and the Finance Act, 2003 in light of previous judgments. It was held that the Apex Court's decision in a specific case governed the instant case, determining that the assessee had no liability to pay service tax under section 73 of the Finance Act, 1994. The Tribunal set aside the revisional authority's decision, emphasizing the applicability of the previous court rulings to the current situation.

Issue 4:
As the assessee's appeal was allowed, they were entitled to the consequential relief of refund, as established in previous case law and supported by the Apex Court's decision. The Tribunal upheld the lower appellate authority's order for the grant of refund to the assessee, dismissing the revenue's appeal. The entitlement to refund was deemed valid despite certain civil appeals filed by the Department post the Apex Court's decision on the issue.