2008 (1) TMI 178 - AT - Service Tax

Demand raised u/s 73(a) on appellants for the Goods Transport Operators Service availed during 16-11-97 to 1-6-98 - even the amended section 73 takes in only the case of assessees who are liable to file return u/s 70. Admittedly, the liability to file return is cast on the appellants only u/s 71A. The class of persons who come u/s 71A is not brought under the net of section 73 in view of decision of tribunal in LH. Sugar Factories Ltd. s case, affirmed by SC, demand is not sustainable

Summary

Issues involved: Appeal against vacation of demand of service tax for Goods Transport Operators Service availed during a specific period, imposition of penalties by original authority, interpretation of section 73(a) of the Finance Act, 1994, applicability of previous Tribunal and Apex Court decisions on similar issues.

Analysis:

- The appeals were filed by the revenue challenging the vacation of demand of service tax for Goods Transport Operators Service availed by the appellants during a particular period, along with the vacation of penalties imposed by the original authority by the Commissioner (Appeals) in the impugned orders.

- The original authority had invoked section 73(a) of the Finance Act, 1994 to demand service tax for the GTO service utilized by the appellants during the relevant period. The lower appellate authority, while disposing of the appeals, referred to a previous Tribunal decision in L.H. Sugar Factories Ltd. v. CCE, where it was found that the issue had been settled against the revenue. This decision was affirmed by the Apex Court.

- The revenue argued that the issue had not reached finality as the department had filed civil appeals in the Supreme Court against similar adverse orders of the Tribunal in two cases. However, the Tribunal, considering the submissions from both sides, reiterated the observations made in the LH Sugar Factories Ltd. case. The Tribunal held that the liability to file a return under section 71A did not bring the appellants under the net of section 73, making the show-cause notices issued to the appellants invoking section 73 not maintainable.

- The Apex Court in CCE v. LH Sugar Factories Ltd. agreed with the Tribunal's conclusion and dismissed the appeals filed by the revenue. The Tribunal, following the Apex Court's decision, dismissed the appeals filed by the revenue, stating that there was no reason to deviate from the stand taken in accordance with the ratio of the Apex Court's decision.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both parties, and the legal reasoning behind the Tribunal's decision to dismiss the revenue's appeals based on the interpretation of relevant provisions and previous judicial decisions.