2008 (8) TMI 219 - AT - Service Tax

C/F Agent demand for period involving retrospective validation of levy on service recipients - scheme has undergone several changes by way of retrospective amendments to the definition of assessee person liable to collect the tax and on the person on whom the liability can be fastened and on the requirement of filing returns appellant has made a prima facie case in his favour as covered by SC decision in case of L.H. Sugar Factories Ltd. (supra) and Hindustan Zinc Ltd.- stay granted

Summary

Issues:
1. Service tax demand for the period 16-7-1997 to 31-8-1999 and imposition of penalties.
2. Liability under Rule 2(1)(d)(xii) for the first period and the requirement to file returns.
3. Liability as a service provider for the second period and the absence of specific Notification under Section 68(2).
4. Amendment to the definition of 'assessee' by the Finance Act, 2000 and the invocation of Section 73 for recovery of demand.
5. Applicability of decisions in the cases of L.H. Sugar Factories Ltd. and Hindustan Zinc Ltd.
6. Waiver of pre-deposit of dues and stay on recovery till appeal disposal.

Analysis:
1. The case involved a service tax demand for a specific period along with penalties. The advocate argued the bifurcation of the demand period and challenged the invocation of Section 73 for recovery.

2. Regarding the first period, the advocate contended that the liability under Rule 2(1)(d)(xii) was initially imposed on the recipient but was later annulled by the Supreme Court. The retrospective amendments mandated duty discharge, but Section 73 could not be applied as they were not required to file returns under Section 70 until the insertion of Section 71A by the Finance Act, 2003.

3. For the second period, the argument focused on not being the service provider and the absence of a specific Notification under Section 68(2) during that time. Reference was made to the Hindustan Zinc Ltd. case to support the claim.

4. The Departmental Representative (DR) emphasized the amendment to the definition of 'assessee' by the Finance Act, 2000, making the appellant liable to file returns under Section 70. The invocation of Section 73 for recovery was justified based on these amendments.

5. The Tribunal considered the changes in the tax scheme due to retrospective amendments and the applicability of decisions in the L.H. Sugar Factories Ltd. and Hindustan Zinc Ltd. cases. The Tribunal found merit in the submissions made by the advocate, indicating alignment with the decisions cited.

6. Ultimately, the Tribunal ruled in favor of the appellant, waiving the pre-deposit of dues and staying the recovery process until the appeal's final disposal. This decision was announced and pronounced in open court on a specified date.