Judgment:
1. Shree Ganpati Synthetics, M/s. Narinder Paper Mills and M/s. Behal Spg. Mills have filed appeals along with stay petitions praying for staying the operation and implementation of order passed by the Commissioner of Central Excise.
2. None appears for the appellants. We have perused the evidence on record, the adjudication order and the relevant sections of the Finance Act and Rules framed for the purpose of Service Tax. We note that the amount of duty has not so far been quantified, therefore, the stay petitions are dismissed as being pre-mature.
3. Since the issue is that of interpretation and is covered by the law explicitly, we proceeded to decide the appeals themselves.
4. The facts of the cases are that Service Tax at the rate of 5% was introduced on Goods Transport Operator Services. SCNs were issued demanding Service Tax during the period 16.11.1997 to 2.6.1998. In the meantime the Hon'ble Supreme Court in the case of Laghu Udyog Bharti v.Union of India, held the relevant provisions as ultra-vires. The proceedings pursuant to the SCNs were dropped. However, the Department again issued SCNs. The learned Commissioner held that Service Tax at a rate of 5% was payable during the period 16.11.1997 to 2.6.1998 along with interest @ 24%. Being aggrieved by this order, the appellants have filed the captioned appeals before us.
5. Shri Hitesh Shah, Id. DR submits that consequent upon the decision of the Hon'ble Supreme Court in the case of Laghu Udyog Bharti v. Union of India, the demands of duty for the period 16.11.97 to 2.6.98 were dropped. However, in the Finance Bill, 2000 Clauses 112 and 113 were introduced and on enactment of Finance Act, 2000 these two clauses became Sections 116 and 117 of Chapter V of the Finance Act, 2000. He submits that with the introduction of these two new Sections in the Finance Act, 2000, Service Tax along with interest became payable. He, therefore, submits that the appeals may be rejected.
7. We have, however, perused the evidence on record, the case law cited as also the Finance Act introducing Service Tax and Sections 116 & 117 of the Finance Act, 2000. We note that Service Tax was introduced under Service Tax Rules, 1994. Pursuant to these Service Tax Rules, demand of service tax was raised by issue of SCNs. Before adjudication of the SCNs, the Hon'ble Supreme Court in the case of M/s. Laghu Udyog Bharti held that the provisions of law making the user of the service responsible to pay the service tax were ultra-vires. Pursuant to this judgment of the Hon'ble Supreme Court, proceedings under these SCNs were dropped. However, with the enactment of Sections 116 and 117 by Finance Act, 2000, Service tax became leviable retrospectively for the period from 16.11.97 to 2.6.98 in the present cases. Accordingly, we agree with the findings of the Id. Commissioner reading as.
In view of the above the subject Order-in-Original is revised under Section 84 of Chapter V of Finance Act, 94, and the party is directed to calculate and supply the gross freight figures for the period 16.11.97 to 2.6.98 based on a Chartered Accountant's certificate and deposit the service tax @ 5% on gross freight paid.
Party is further directed to pay interest @ 24% per annum on delayed payment of amount of service tax till the final deposit.
8. Having regard to the provisions of law introduced by the Finance Act, 2000, under Sections 116 & 117, we do not see any legal or factual infirmity in the impugned orders. The impugned orders are, therefore, upheld and the three appeals are rejected accordingly.