2024 (11) TMI 668 - AT - Service Tax

Service tax demand - invoking the extended time proviso - Goods Transport Agency services - appellant are availing the facility of CENVAT Credit on input, input services in capital goods used in the manufacture of their finished products - HELD THAT - We are of the view that the matter is no longer res integra as this Tribunal in case of PSL Limited 2014 (11) TMI 84 - CESTAT AHMEDABAD has already decided this matter in favour of the appellant as held it is apparent that till the point of time Section 73 of the Finance Act, 1994 came to be substituted w.e.f. 10-9-2004 provisions of the said Section could not be made applicable despite retrospective amendment in Sections 68 and 71A of the Finance Act, 1994. In these circumstances, admittedly, the assessee could not be faulted with for not having filed a return after getting himself registered. More particularly, when one considers the language employed in the proviso below sub-section (1) of Section 68 and the provisions of Section 71A of the Finance Act, 1994, it is not possible to state that the language of the Statute is so clear that any default can be fastened on the respondent-assessee. Thus, we find that the entire demand under the impugned show cause notice is barred by period of limitation and therefore, we find no merit in the impugned Order-In-Appeal. Accordingly, we set aside the same.

Summary

Issues:
1. Applicability of service tax on goods transport operator services.
2. Validity of demand under the show cause notice.
3. Barred by period of limitation.

Analysis:
1. The judgment revolves around the issue of the applicability of service tax on goods transport operator services. The case involved the appellant, engaged in the manufacture of chemicals, who were issued a show cause notice demanding service tax under the Finance Act, 1994. The notice was based on amendments to the Act regarding the levy of service tax on services provided by goods transport operators. The appellant contested the demand, citing legal challenges and subsequent amendments validating the recovery of service tax from the service receiver. The Honorable Supreme Court's judgment and subsequent legislative amendments were crucial in determining the liability for service tax payment.

2. The validity of the demand under the show cause notice was a significant point of contention. The appellant argued that the demand was time-barred as it pertained to the period of 1997-1998, and the notice was issued in 2008. The appellant contended that the demand fell outside the normal period of limitation under Section 73(1) of the Finance Act, 1994. The appellant relied on various legal decisions to support their argument, emphasizing the importance of the limitation period in such cases. The Tribunal considered the appellant's arguments and legal precedents in determining the validity of the demand under the show cause notice.

3. The issue of the demand being barred by the period of limitation was crucial in the judgment. The Tribunal referred to a previous case where a similar matter was decided in favor of the appellant based on the retrospective nature of the demand and the absence of pending proceedings against the appellant at the time of the retrospective amendment. The Tribunal analyzed the legislative history, legal interpretations, and High Court decisions to conclude that the demand under the show cause notice was indeed barred by the period of limitation. As a result, the Tribunal set aside the impugned Order-In-Appeal, ruling in favor of the appellant and allowing the appeal based on the limitation issue.

In conclusion, the judgment addressed complex issues related to the applicability of service tax, the validity of the demand under the show cause notice, and the period of limitation. The detailed analysis considered legal challenges, legislative amendments, precedents, and interpretations to arrive at a decision favorable to the appellant.