2018 (11) TMI 21 - AT - Service Tax

Liability of Service tax - services of goods transport operators (GTO) - freight charges to the transporters - case of appellant is that the SCN were bad in law being vague as no service tax amount proposed to be recovered was not mentioned - Held that - Similar issue has been considered by this Tribunal in the case of Pandurang SSK Ltd. 2011 (2) TMI 671 - CESTAT, MUMBAI . In the said case also, the demand related to the period 16.11.1997 to 1.6.1998 for availing of services of goods transport operator (GTO). The service tax since not paid on the freight charges, initially a show cause notice was issued in December 2001; later, a revised show cause notice was issued in February 2004 post amendment and insertion of Section 71 and Rule 7A in the Finance Act, 1994 and Service Tax Rules, 1994 - it was held by the Tribunal that It is settled law that nothing can be added to a statute, nor can anything be deleted therefrom, by a court, whose function it is to interpret the expressions as they exist in the statute. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against order-in-appeal for quantification of service tax demand without specifying amount recoverable. Validity of show cause notices without quantification. Interpretation of legislative intent in recovery of service tax from recipients of GTO services. Applicability of Tribunal judgments in similar cases.

Analysis:
1. The appeal was filed challenging the order-in-appeal for quantification of service tax demand without specifying the amount recoverable. The appellant had availed services of goods transport operators (GTO) during a specific period but failed to pay service tax. Show cause notices were issued without quantifying the amount recoverable, leading to adjudication proceedings being dropped. The Revenue appealed, resulting in the matter being remanded for demand quantification, prompting the present appeal.

2. The appellant's advocate argued that the show cause notices were vague as the amount proposed for recovery was not mentioned. Citing Tribunal and High Court judgments, the advocate contended that demands issued without quantification are unsustainable in law. The Revenue's representative relied on a Tribunal judgment to support the position that quantifying the demand in show cause notices is not necessary.

3. The Tribunal analyzed similar cases and observed that the legislative intent behind the relevant provisions of the Finance Act, 1994 was to recover service tax from both service providers and recipients of GTO services. The Tribunal emphasized strict construction of statutory provisions and held that demands issued without quantification were not maintainable, citing precedents where show cause notices issued before a specific amendment were deemed invalid.

4. Referring to previous Tribunal decisions, the Tribunal upheld that show cause notices and corrigenda issued before a certain amendment to the Finance Act, 1994 were not in accordance with the law, rendering the demands unsustainable. Upholding judicial discipline, the Tribunal dismissed the Revenue's appeals, aligning with the precedent set in similar cases.

5. Ultimately, the Tribunal set aside the impugned order and allowed the appeal, emphasizing the importance of statutory interpretation and adherence to legal principles in determining the validity of demands and show cause notices in service tax cases involving recipients of GTO services.

6. The judgment highlights the significance of clarity in show cause notices, the interpretation of legislative intent, and the application of legal principles in determining the validity of demands for service tax from recipients of GTO services, as evidenced by the Tribunal's analysis and decision in this case.