2007 (4) TMI 246 - AT - Service Tax

Demand relates to service tax for the services of Goods Transport Operator - period 16-11-97 to 2-6-98 - law was amended by Finance Act, 2003 making the recipient of the service as liable to pay service tax on services provided by Goods Transport Operators SCN have been issued in April, 2006 much after the retrospective amendment requiring the recipient to pay the service tax - demand is clearly time barred as held in similar cases by the order of the Tribunal in Laghu Udyog Bharti

Summary

Issues:
Service tax demand for the period 16-11-97 to 2-6-98; Challenge of service tax payment by recipients; Amendment by Finance Act, 2003 making recipients liable; Issuance of show cause notices after prescribed times; Applicability of time bar for demands.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Ahmedabad pertains to multiple appeals concerning a common issue arising from a shared order dated 31-10-2006. The appeals revolve around the service tax demand for the period 16-11-97 to 2-6-98, specifically related to services provided by Goods Transport Operators. Initially, the service tax payment responsibility was on the recipients of the services, which was challenged and reached the Hon'ble Supreme Court. The Supreme Court's decision in the Laghu Udyog Bharti case did not uphold the provisions for recovery from recipients, leading to an amendment by the Finance Act, 2003, shifting the liability to the service recipients.

In these cases, show cause notices were issued in April 2006, much later than the retrospective amendment requiring recipients to pay the service tax. The appellant's counsel relied on the decision in the BPL Engineering Ltd. case, which held that demands in similar circumstances were time-barred. Considering the circumstances and precedents, the Tribunal concluded that the duty demands in these cases were indeed time-barred, consistent with previous rulings. As a result, all the appeals were allowed by the Tribunal.

This judgment highlights the importance of timely issuance of show cause notices and the impact of legislative amendments on tax liabilities. It underscores the significance of legal precedents in determining the applicability of time bars for demands, ensuring consistency in tax dispute resolutions.