2009 (10) TMI 207 - AT - Service Tax

Goods Transport Operators (GTO) services- original authority had confirmed the demand of service tax amounting to under the category of Goods Transport Operators (GTO) services received by the respondent during the period from 16-7-1997 to 16-10-1998 demanded through show-cause notice which was challenged in appeal and the matter was remanded back for fresh decision duly observing the principles of natural justice. The original authority vide impugned de novo order confirmed the amount of service tax also demanded interest under section 75 imposed penalties under each sections of 76 77 and 78 of the Finance Act 1994. On appeal the Commissioner (Appeals) relying upon various decisions of the Tribunal set aside the Order-in-Original and allowed the appeal. Held that- I do not find any infirmity in the impugned order. In the facts and circumstances of the case the impugned order is correct and legal. I do not find any merit in the Revenue s appeal and the same is dismissed.

Summary

Issues: Liability to pay service tax for GTO services beyond the limitation period.

In this case, the Revenue filed an appeal against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals-II), Bangalore, confirming the demand of service tax for 'Goods Transport Operators' (GTO) services received by the respondent. The original authority confirmed the demand through an Order-in-Original, which was challenged in appeal and remanded back for fresh decision. The original authority confirmed the amount of service tax, interest, and imposed penalties. However, on appeal, the Commissioner (Appeals) set aside the Order-in-Original and allowed the appeal. The Revenue, aggrieved by this decision, approached the Tribunal. The issue involved was the liability to pay service tax for GTO services received beyond the limitation period. The Commissioner (Appeals) found that the demand made through the show-cause notice was beyond the extended period of limitation specified under section 73 of the Finance Act, 1994. The Commissioner (Appeals) concluded that the demand was hit by limitation and needed to be set aside. The Tribunal upheld the Commissioner (Appeals)'s decision, citing the settled law by the Hon'ble Supreme Court in similar cases. The Tribunal found no infirmity in the impugned order and dismissed the Revenue's appeal.

This judgment highlights the importance of adhering to the statutory time limits for demanding service tax. The Tribunal emphasized that demands made beyond the limitation period specified under the Finance Act, 1994 are not sustainable. The Tribunal reiterated the principles of natural justice and the settled law by the Hon'ble Supreme Court in cases where demands for service tax were made beyond the statutory time limits. The judgment serves as a reminder for tax authorities to initiate actions within the prescribed time limits and not to make fresh demands after the lapse of the specified period. The decision underscores the significance of upholding legal provisions and following established judicial precedents in matters concerning taxation and liability to pay service tax.