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Cce, Meerut-Ii vs M/S. L.H. Sugar Factories Ltd on 3 March, 2008

13. Having considered the rival contentions, I find that the issue of levy of service tax on GTO service, on the receiver of service under reverse charge mechanism was held ultra virus by the Hon‟ble Supreme Court in the case of L. H. Sugar (supra) by judgment dated 27.07.2005. It was categorically held that „person‟ required to file return under Section 71A of the Act was not covered under Section 73, as it stood on the date of issuance of the show cause notice. I find that it is admitted fact that the appellant have taken service tax registration and are filing the periodical returns regularly. The appellant have maintained proper books of accounts in the normal course of business. The only allegation in the show cause notice is that the appellant have not discharged the service tax liability on 7 „reverse charge basis‟ on Goods Transport Service, received during the period 16.11.1997 to 01.06.1998. It is further alleged in the show cause notice that service tax was imposed as transport of goods of service w.e.f. 16.11.1997 vide Notification No. 41/1997-ST dated 5.11.1997. Further, the Central Government vide Notification No. 42/1997-ST dated 5.11.1997 amended the Service Tax Rules and in Rule 2(1)(d) clause (xvii) was inserted which read as follows:-
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