Customs, Excise and Gold Tribunal - Tamil Nadu
Cce vs Sree Nithyakalyani Textiles Ltd. on 3 June, 2005
ORDER P.G. Chacko, Member (J)
1. In this appeal of the Revenue, the challenge is against dropping of a demand of Service Tax on the respondents. The respondents had availed the services of goods transport operators during the period 16.11.1997 to 1.6.1998 but did not pay any tax thereon under the Finance Act, 1994. On 19.12.2000, the Department issued a show-cause notice to them--demanding Service Tax of Rs. 2,42,925/- on freight charges of Rs. 48,58,490/- paid by them to goods transport operators for the said period. The original authority confirmed this demand under Section 73 of the above Act and imposed penalties on the assessee under Sections 76, 77 and 78 of the Act. The first appellate authority set aside the order of the lower authority, in an appeal filed by the assessee. Hence the present appeal.
2. After examining the records and hearing both sides, I find that the lower appellate authority has rightly decided the case before it in terms of the Hon'ble Supreme Court's ruling in Laghu Udyog Bhatati v. Union of India and certain decisions of this Tribunal. Ld. Counsel for the respondents has cited the following decisions of the Tribunal:
(i) Final Order No. 930 & 931/2004 dated 20.10.2004 in Appeal Nos. S/22 8b 39/2004 : 2004 (117) ECR 670 (T) Commissioner v. BID Parry Confectionery Ltd. and vice versa.
(ii) Final Order No. 335/2005 dated 7.3.2004 in Appeal No. S/91/2004 : 2005 (123) ECR 365 (T) Commissioner v. Silver Spring Spinners India (P) Ltd..
The ratio of the cited case law can be had from paragraphs 5 and 6 of Final Order No. 930 & 931/2004 ibid, which are extracted below:
5. I have carefully considered the submissions. The assessees in both the appeals are recipients of taxable services, namely 'Clearing and Forwarding' service, "Goods Transport' service. In respect of both these services, rules had been framed by Central Government to recover Service Tax from the recipients of service. But these rules were held to be ultra vires Sections 65 and 66 of the Finance Act, 1994 by the Hon'ble Supreme Court in the case of Laghu Udyog Bharati (supra). In order to get over the Supreme Court's ruling, Parliament amended Section 65 ibid in relation to the limited period, 16.7.1997 to 16.10.1998 under Section 116 of the Finance Act, 2000, whereby recipients of 'Goods Transport' service and 'Clearing and Forwarding' service were defined as "assessees". Further, for the aforesaid limited period, Parliament declared that "any action taken or anything done or purported to have been (i) taken or done at any time during the period commencing on and from the 16th day of July, 1997 and ending with the day, the Finance Act., 2000 receives the assent of the President shall be deemed to be valid and always to have been valid for all purposes, as validly and effectively taken or done" vide Section 117 of the Finance Act, 2000. Later on, the Finance Act., 2003, made certain amendments to the Service Tax provisions of the Finance: Act, 1994, whereby the aforesaid assessees were required to present Tax Returns to the proper officer within six months from 14.5.2003 (date on which the Finance Act, 2003 received Presidential assent). Ld. Counsel has also> invited my attention to the legal opinion given by the Additional Legal Advisor to Government of India. This opinion is to the effect that Service Tax could not be recovered from the aforementioned assessees for the period covered by the amendment where no action was initiated against them foir such recovery during such period.
6. In the instant case, the demands of Service Tax were raised beyond 12.5.2000 in show-cause notices dated 13.5.2002 and 14.2.2003. such demands are not effected by the amendments made to Section 65 by Parliament under Section 116 of the Finance Act, 2000 and consequently the y are hit by the apex court's ruling in Laghu Udyog Bharati (Supra).
3. In the result, the Revenue's appeal fails and the same is rejected.
(Operative portion o the order was pronounced in open court on 3.6.2005)