Judgment:
1. These two appeals have been filed against the common order-in-appeal passed by the Commissioner (Appeals), by the appellants.
2. The facts are not much in dispute. The appellants were receiving the services under Goods Transport Operators Services in relation to the carriage of the goods by road and were registered with the central excise department for collecting service tax in terms of Notification No. 73/79-ST, dated 5-11-97. They, however, filed refund claim of Rs. 39,018/- which they earlier deposited as service tax, after the pronouncement of the judgment of the Apex Court in the case of Laghu Udyog Bharti and Ors. v. Union of India, [1999 (112) E.L.T. 365 (S.C.)], dated 27-7-99 holding the provisions of Rule 2(d)(xii) and (xvii) as ultra vires and quashed the same. The refund claim of the appellants was accordingly sanctioned but meanwhile the Central Government amended the service tax rules in the Finance Act, 2000 and gave retrospective effect to the amendment vide which the Government revalidated the relevant rules and sub-rules which were earlier struck down by the Apex Court. The appellants were accordingly then issued show cause notice as to why the sanctioned refund should not be denied to them as the service tax has become payable by them after retrospective amendment of the relevant rules and sub-rules. After getting their reply, the Deputy Commissioner ordered the recovery of the amount of refund of Rs. 39,018/- from the appellants. That order had been affirmed by the Commissioner (Appeals) through the impugned order.
3. The learned Counsel has firstly contended that the amendment of the relevant rules and sub-rules could not be given retrospective effect and that vires of the amendment had already been challenged before the Apex Court. Therefore, no recovery of service tax could be ordered from them. But, in our view, this contention of the counsel is wholly mis-conceived and not liable to be accepted. The vires of the Government's action of giving retrospective effect to the amendment made in the rules and sub-rules which were earlier struck down by the Apex Court, cannot be gone into by the Tribunal. The Apex Court before whom the matter is said to be subjudice in that regard, has not stayed the operation of the amended provisions. It has not been disputed that after amendment the appellants had become liable to pay service tax.
That being so, the impugned order of the Commissioner (Appeals) cannot be said to be in any manner bad in law.
4. Another argument pressed into service by the learned Counsel is that no show cause notice under Section 11A of the Central Excise Act, could be issued as this provision has not been made applicable to the service tax recovery, as it does not find mention in Section 83 of the Service Tax which relates to the application of certain provisions of the Central Excise Act in relation to the service tax. Apart from this, according to the counsel, the Deputy Commissioner was not competent to issue show cause notice, in view of the Board's Circular dated 30-5-2000 vide which only the Commissioner has been authorised to issue show cause notice in such cases. Therefore, the impugned order, on this ground, is bad in law. But, in our view, this argument of the learned Counsel too, is devoid of any force of law. Section 83 of the Service Tax contains the details of sections of the Central Excise Act, which had been made applicable in relation to the service tax. Non-mention of Section 11A therein is not of any avail to the appellants. Admittedly, before denying the sanctioned refund to the appellants, they were, under the rules of natural justice, required to be heard and for complying with those rules, they were issued notice which has been termed by the appellants as show cause notice. Under the service tax, the Deputy Commissioner was competent to issue notice to the appellants for recovery of service tax for the period in dispute. At that time, the Circular of the Board dated 30-5-2000 was not in existence.
Moreover, the provisions of Section 11A of the Excise Act, under which the said circular has been issued by the Board, has not been directly made applicable in relation to the service tax. This circular had been issued subsequent to the period in dispute. Therefore, keeping in view all these facts, no capital out of this circular can be made by the appellants for questioning the validity of the service tax demand confirmed against them.
5. Another contention raised by the learned Counsel is that earlier order sanctioning the refund could not be reopened by issuing show cause notice and that the Deputy Commissioner was not competent to review his order of refund. But, in our view, this contention of the counsel is also wholly misconceived and deserves to be rejected. There had been no review of any earlier order by the Assistant Commissioner/Deputy Commissioner. The Deputy Commissioner only called upon the appellants after amendment in the service tax, to pay service tax for the disputed period. He, by issuing notice, did not intend to recall or review the earlier order. The amendment, as observed above, has been given retrospective effect by the Government. By virtue of that amendment, the appellants became liable to pay service tax and as such, they had been rightly called upon to pay the same. The ratio of law laid down in Collector v. Rajaram Maize Products - 1998 (97) E.L.T.157 and Bhor Industries Limited v. Union of India - 1980 (6) E.L.T. 752 (Guj.), referred to, by the counsel is not applicable to the present cases. In those cases, it has been observed that the Assistant Collector is not empowered to review his own order and that the judicial order cannot be reopened. But such is not the position in the case in hand.
6. Lastly, the counsel has contended that the recovery is time barred under Section 117 of the Finance Act, as it was required to be effected within 30 days from the date of the Finance Act, 2000 receiving assent of the President. But, in our view, this contention of the counsel is also unfounded. The provisions of Section 117 of the Act, will apply only where service tax has already been refunded as in that event the recovery had to be effected within 30 days from the date of the receipt of assent of the President, of the Finance Act. But in the case in hand, the counsel has not disputed that the refund of service tax had not made to the appellants. The amount was still with the department when the notice was issued for denying the actual payment of the same to the appellants. Therefore, the recovery of the service tax cannot be said to be hit by the provisions of Section 117 of the Finance Act.
7. On merits, we do not find any illegality in the impugned order of the Commissioner (Appeals). The appellants are liable to pay the service tax and the same had been rightly demanded from them.
8. In the light of the discussion made above, we do not find any merits in both the appeals of the appellants and the same are ordered to be dismissed.