1. Stay petition and Appeal have been filed in respect of the O-I-A.No. 28/2005 (M-ST) dated 14-7-05, passed by the Commissioner of Central Excise (Appeals) Chennai. Since the issue is covered by the Supreme Court decision, we are taking up both the stay and appeal together for decision.
2. Shri P.C. Anand, ld. Chartered Accountant appeared for the appellants and Shri B.N. Meena, ld. SDR, appeared for the respondents.
3. The issue is regarding the Service Tax liability under "goods transport operator" service for the period from 16-11-97 to 1-6-98.
Service tax on goods transport operator service was introduced with effect from 16-11-97. However, this service was exempted with effect from 2-6-98 vide Notification No. 49/98-ST dated 2-6-98. During the intervening period (i.e.) from 16-11-97 to 1-6-98, the user of the service has been made liable to discharge the service tax liability.
However, the provision has been struck down by the Apex Court in the case of Laghu Udyog Bharti and Anr. v. Union of India and Ors.
. Consequently, Government had effected retrospective amendments to the provisions of Sections 65, 66 & 67 of the Finance Act, 1994 and Rule 2 of Service Tax Rules, 1994 through Finance Act, 2000 vide Sections 116 and 117 and also through Section 158 of Finance Act, 2003. In view of the retrospective amendment, Revenue proceeded to recover the service tax from the appellants. The appellants relied on the Tribunal decision in the case of L.H. Sugar Factories Ltd. v.Commissioner , which held that in spite of the amendment by Finance Act, 2003, the show cause notice is not sustainable. The lower appellate authority did not consider the decision of the Tribunal in the L.H Sugar Factories case on the ground that Revenue has gone in appeal against the decision to the Supreme Court. The ld. Chartered Accountant, Shri P.C. Anand, said that the Tribunal's decision has been upheld by the Supreme Court in Commissioner of C.E. Meerut-II v. L.H. Sugar Factories Ltd. citation 2006 (3) S.T.R. 715 (S.C.) : 2005 (187) E.L.T. 5 (S.C). The Supreme Court observed the following: The above would show that even the amended Section 73 takes in only the case of assessees who are liable to file return under Section 70. Admittedly, the liability to file return is cast on the appellants only under Section 71A. The class of persons who come under Section 71A is not brought under the net of Section 73. The above being the position show cause notices issued to the appellants invoking Section 73 are not maintainable.
Since, the issue is squarely covered by the Apex Court decision we allow the appeal with consequential relief.