Full Judgment
2. The issue involved in this case is regarding service tax liability fastened upon the respondents in respect of services received by them in the case of Goods Transport Operators. By a retrospective amendment vide Section 117 of Finance Act, 2000 the service receivers were required to pay service tax in respect of GTO, provided demand of service tax was raised within the time as provided by retrospective amendment. In this case the demand was raised in October, 2002 i.e.
almost 2 years after amendment of the Finance Act. Adjudicating proceedings culminated in confirmation of demand of service tax and imposition of penalty. On appeal the Commissioner (Appeals) set aside the Order-in-Original on the ground of time bar. Hence, this appeal by the Department.
3. None appeared for the respondents despite notice. Heard learned D.R.It is the submission of the learned D.R. that the issue involved in this case is in respect of services received by the respondents from G.T.O. By retrospective amendment in Finance Act, 2000 the Government had every intention to direct the recipient of service receiver of GTO to discharge the duty liability and it can not get be narrowed own that the recipient of service of GTO need not get covered under service tax net.
4. Considered the submissions made learned D.R. I find that the Commissioner (Appeals) has allowed the appeal of the respondents by observing as under: 6. The appellants had mainly relied on the decision of Hon'ble Tribunal in the case of LH Sugar Factories Ltd., v. CCE, Meerut-II . The Hon'ble Tribunal has held that: Service Tax - Liability to pay - person receiving taxable service of goods transport operators is not liable to tax - Even though these persons are deemed liable to pay tax under Section 69 of Finance Act, 1944 (as amended) as liability to file returns is cast on them only under Section 71A ibid, and not under Section 70 ibid, they are not covered under Section 73 ibid - Liability under Section 73 ibid covers case of the assessee who are liable to file return under Section 70 ibid - Accordingly, they are not liable to pay tax.
7. The department had filed an appeal against the above decision of Hon'ble Tribunal which has also been dismissed by the Hon'ble Apex Court 2005 (187) ELT 5 (SC). The Hon'ble Apex Court has held that: The above would show that even the amended Section 73 takes in only the case of assessee 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 case notices issued to the appellants invoking Section 73 are not maintainable.
From the above it is very clear that the provisions of Section 117 bringing the retrospective amendment would operate within the time frame provided for the recovery. Since in this case it is not disputed that the show cause notice was issued in October, 2002, almost after 2 years, of the retrospective amendment, I find no infirmity in the Order-in-Appeal of the Commissioner (Appeals). Further the case of L.H.Sugar v. CCE, Meerut relied upon by the Commissioner (Appeals), was taken up by the department to the Supreme Court and the Hon'ble Supreme Court was pleased to dismiss the appeal of the department as reported in 2005 (187) ELT 5 (SC).
5. In view of the above I do not find any merit in the department's appeal. Appeal is dismissed.