2007 (4) TMI 189 - AT - Service Tax

C/F agent non-filing of returns or non-payment of tax for period July 1997 to March 1998 - in view of party s own case relating to Goods Transport Operators Service before tribunal for the period 16.11.97 to 1.6.98, tax is not leviable on assessee as C/F agent ratio of the decision relating to GTO service is equally applicable to the present case relating to C&F service - demand and penalty set aside

Summary

Issues:
1. Applicability of service tax on Clearing & Forwarding Agents Service from July 1997 to March 1998.
2. Confirmation of demand of service tax and penalty by the original authority.
3. Upholding of decision by the Commissioner (Appeals).
4. Comparison with a previous judgment on Goods Transport Operators Service.
5. Interpretation of Sections 70, 71, 71A, and 73 of the Finance Act, 1994.
6. Legal sustainability of the appellants' contentions based on the apex court's ruling in L.H. Sugar Factories case.

Analysis:
1. The appellants received "Clearing & Forwarding Agents Service" during July 1997 to March 1998 but did not file service tax returns or pay tax. A show-cause notice was issued by the department demanding tax and proposing a penalty. The original authority confirmed a demand of Rs.2,10,902/- as service tax and imposed a penalty of Rs.2,31,902/ which was upheld by the Commissioner (Appeals).

2. The Bench referred to a previous judgment on "Goods Transport Operators Service" where they ruled in favor of the appellants. They found that the decision on Goods Transport Operators Service was equally applicable to the present case of Clearing & Forwarding Agents Service. The judgment in L.H. Sugar Factories Ltd. Vs CCE Meerut, followed by the apex court, was considered, and it was noted that the service tax issue for the relevant period had been decided in favor of the assessee.

3. The appellants argued based on Sections 70, 71, 71A, and 73 of the Finance Act, 1994, contending that the department had issued the show-cause notices within its powers. However, the legal sustainability of their contentions was questioned in light of the apex court's ruling in the L.H. Sugar Factories case. The apex court's judgment was found to render the appellants' legal proposition unsustainable.

4. Consequently, the impugned order confirming the demand of service tax and penalty was set aside, and the appeal was allowed with consequential relief. The decision was dictated and pronounced in open court, providing relief to the appellants in this case.