2008 (12) TMI 43 - HC - Service Tax

CBEC letter dated 20/9/2004 communicating Amnesty Scheme - tax, interest etc. already paid, before expiry of the period provided in the Scheme i.e. 30.10.04 - so benefit of the scheme is available to the assessees, who were already registered though belatedly & had deposited the entire tax and interest, before the cut off date, prescribed in the Scheme i.e. 30.10.04 - if the amount of penalty has been deposited by the assessees, then it need not be refunded to them revenue s appeal dismissed

Summary

Issues Involved:
1. Applicability of the Amnesty Scheme dated 20.09.2004 for service tax defaulters.
2. Whether the circular issued by the Central Board of Excise & Customs governs the case of the respondents.
3. Nature and statutory force of the Amnesty Scheme.
4. Interpretation of the Amnesty Scheme and its applicability to registered assessees.
5. Judicial propriety and consistency in Tribunal decisions.

Issue-wise Detailed Analysis:

1. Applicability of the Amnesty Scheme dated 20.09.2004 for service tax defaulters:
The core issue across the appeals was whether the Amnesty Scheme launched by the Finance Minister on 20.09.2004 applied to the respondents, who were already registered but had defaulted in paying service tax. The Tribunal had previously ruled in favor of the assessees, granting them immunity from penalties under the scheme, provided they paid the requisite tax and interest by the cut-off date of 30.10.2004.

2. Whether the circular issued by the Central Board of Excise & Customs governs the case of the respondents:
The Tribunal's orders indicated that the circular dated 20.09.2004, which outlined the Amnesty Scheme, was applicable to the respondents. The High Court examined whether this circular had statutory force and whether it could be considered a "taxing statute." It concluded that the circular was an administrative instruction rather than a statutory notification and thus lacked the statutory efficacy of Section 37B of the Central Excise Act.

3. Nature and statutory force of the Amnesty Scheme:
The court analyzed the nature of the Amnesty Scheme and concluded that it was not a statutory notification but an administrative instruction aimed at widening the service tax net and augmenting revenue. The scheme was intended to benefit defaulters who registered and paid their dues by the specified date. It was found to be an administrative measure rather than a statutory one, and thus it did not have the binding force of a taxing statute.

4. Interpretation of the Amnesty Scheme and its applicability to registered assessees:
The High Court reviewed multiple Tribunal decisions and found a majority consensus that the scheme applied to assessees who were already registered but had defaulted in paying service tax. The court emphasized the scheme's intent to provide immunity from penalties to defaulters who complied with its requirements by the cut-off date. The court rejected the narrower interpretation that the scheme only applied to those who registered after the scheme's announcement.

5. Judicial propriety and consistency in Tribunal decisions:
The court noted the importance of judicial propriety, emphasizing that coordinate benches should maintain consistency in their rulings. It observed that the majority of Tribunal decisions favored the broader interpretation of the Amnesty Scheme, granting immunity to registered assessees who paid their dues by the cut-off date. The court decided to uphold this majority view to avoid unsettling the established legal position and generating unnecessary litigation.

Conclusion:
The High Court dismissed the appeals, affirming that the Amnesty Scheme applied to the respondents. It held that the scheme benefited both the service providers and the revenue, and thus should be implemented reasonably and non-discriminatorily. The court clarified that the benefit of the scheme extended to all defaulters who complied with its conditions by the specified date, regardless of their registration status prior to the scheme's announcement.