2017 (7) TMI 563 - AT - Service Tax

GTA service - reverse charge mechanism - whether the appellant is failed to pay Service Tax which it was liable to pay Service Tax under Section 68 of the Act? - Held that - the appellant in view of the provisions of Section 2(i)(d)(xii) & (xvii) of the Service Tax Rules 1994 as validated by Section 117 of Finance Bill 2003 the appellant was held liable to pay Service Tax on Goods Transport Agency service as recipient of service and further required to file return under the amended Section 71A of the Act. Whether provisions of Section 73(1) of the Act are correctly invoked in the case? - Held that - the appellant neither filed the mandatory return nor paid the Service Tax on the Goods Transport Agency service availed and thus they suppressed the material facts from the knowledge of the Revenue with an intention to evade tax and as such the provisions have been rightly invoked. Whether show-cause notice issued without quantification of the Service Tax is sustainable in law? - Held that - reliance was placed on the ruling of the Tribunal in the case of LH Sugar Factories Ltd. Vs. Commissioner of Central Excise Meerut 2004 (1) TMI 111 - CESTAT NEW DELHI where in similar facts and circumstances where SCN was issued it was held that during the relevant period Section 73 takes only in the case of appellant who are liable to file return under Section 70. The liability of filing returns is cast on the appellant under Section 71A as the receiver of service which was introduced in the Finance Bill 2003. Thus during the period in question no notice could have been issued under Section 73 for non-filing of return under Section 70. Accordingly the Tribunal had held that the assessee-service receiver is not required to file return under Section 73 prior to 2003 - the SCN is vague and the same is time barred. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Levy of Service Tax on Goods Transport Agency services provided during a specific period.

Analysis:

1. Levy of Service Tax on Goods Transport Agency Services:
The appellant, a manufacturer, availed services of goods transport operators during a specific period. The issue was whether the appellant was liable to pay Service Tax on these services as the recipient. The show-cause notice invoked Section 73 of the Finance Act, 1994, demanding Service Tax from the appellant. The Tribunal held that the appellant was indeed liable to pay Service Tax on Goods Transport Agency services as the recipient, based on relevant provisions of the Service Tax Rules and Finance Bill. The appellant's failure to file mandatory returns or pay the Service Tax was considered suppression of facts with intent to evade tax, justifying the invocation of provisions under Section 73(1) of the Act.

2. Quantification of Tax Amount in Show-Cause Notice:
The Tribunal emphasized the importance of quantifying the duty amount in a show-cause notice. Citing precedents, it held that a show-cause notice lacking quantification cannot validly raise a demand under the relevant Act. The Tribunal referred to specific cases where the quantification of duty was deemed essential for a valid demand. It further highlighted that the liability to file returns under Section 71A was introduced in the Finance Bill, 2003, and prior to that, no notice could have been issued under Section 73 for non-filing of returns under Section 70. Therefore, the Tribunal quashed the proceedings based on the vague and unsustainable show-cause notice.

3. Validity of Show-Cause Notice and Time Bar:
The appellant challenged the impugned order before the Tribunal, arguing that the show-cause notice was vague and time-barred. The Tribunal agreed with the appellant, finding the notice vague and time-barred. It set aside the impugned orders and upheld the original Order-in-Original, allowing the appeals with consequential relief, if any, in accordance with the law.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the necessity of quantifying duty amounts in show-cause notices and highlighting the importance of adhering to statutory timelines in issuing such notices.