1. These appeals are against demands of service tax on "goods transport service" received by the appellants during the period 16/11/97 to 01/06/98. In the case of M/s. Futura Fibres (Appellants in Appeal No.S/25/04), the demand of tax was raised in a show-cause notice dated 04/01/02, while in the case of M/s. Futura Polymers (Appellants in Appeal No. S/28/04), similar demand was raised in a show-cause notice dated 06/12/01. The original authority confirmed the demands of tax and the first appellate authority sustained the same. Hence these appeals of the assessee.
2. After examining the records and hearing both sides, I find that the question to be decided is whether the appellants qua service-receivers were liable for service tax during the aforesaid period. Ld. Counsel for the assessees has submitted that, as the subject show-cause notices were issued after 12/05/2000 (the date on which the Finance Act, 2000 received Presidential assent), the demands of Service Tax raised therein are hit by the apex Court's ruling in Laghu Udyog Bharati Vs UOI [1999 (112) E.L.T. 365 (S.C.)] = (2002-TIOL-162-SC-ST). Even otherwise, the demands are barred by limitation prescribed under Section 73 of the Finance Act, 1994. The DR has reiterated the findings in the impugned order. Ld. Counsel has pointed out that an issue similar to the issue arising in these appeals was decided by this bench against the Revenue as per Final Order No. 930 & 931/04 dt. 20/10/04. A copy of this final order has been placed on record.
3. On a perusal of the Final Order cited by Ld. Counsel, I find that the issue in the instant appeals stands squarely covered in favour of the appellants. The ratio of the decision covered by the cited Final Order is contained in paras 5 & 6 thereof, 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 and `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 16.07.1997 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 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 received 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 14.05.2003 (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 the Government of India. This opinion is to the effect that Service Tax could not be recovered from the aforementioned service received for the period covered by the amendment where no action was initiated against them for such recovery during such period.
6. In the instant case, the demands of Service Tax were raised beyond 12.05.2000 in show-cause notices dated 13.05.2002 and 14.02.2003. Such demands are not affected by the amendments made to Section 65 by Parliament under Section 116 of the Finance Act, 2000 and consequently they are hit by the Apex court's ruling in Laghu Udyog Bharati (supra). Furthermore, undisputedly, the demands raised by the Department, in these cases, are far beyond the period of limitation prescribed under Section 73 of the Finance, 1994".
4. Following the view taken in Final Order Nos. 930 & 931/04 ibid, I set aside the impugned order and allow these appeals, with consequential relief if any.