Full Judgment
2. The relevant fact that arise for consideration are appellant availed the services of goods transport operators and C & F agents during the period 1997-98. During the relevant period, the receiver of services recipient is liable to pay the service tax. This proposition of the law was challenged by trade in different forums and retrospective amendment was carried out to the Finance Act, 1994, which included in the statute, the provisions for collecting the service tax from the recipient of the services. The appellant paid the service tax involved in this case on 31-1-04 and 4-2-04. They also deposited the interest from 30-11-03 till the payment of the service tax. Show cause notice was issued to the appellant on 16-11-04 directing them to show cause as to why the interest and penalty could not be imposed on them. The adjudicating authority confirmed the demand of interest from the period 13-5-2000 till the payment of service tax and also imposed penalty on the appellant. On an appeal, Commissioner (Appeals) also upheld the same.
3. Learned Consultant appearing for the appellant submits that the issues squarely covered by the decision of this Tribunal in the case of Mount Shivalik Industries Limited v. Commissioner of Central Excise & Customs, Jaipur as reported at 2006 (3) S.T.R. 199 (Tri. - Del.) and submits that the show cause notice was issued to them after the discharge of service tax liability by them.
4. The learned DR submits that the service tax liability though discharged by the appellant, he is liable to pay the interest from 13-5-2000 i.e. the date from which retrospective amendment. Since, they have not discharged the service tax liability, they are also liable for penalty.
5. Considered the submissions made by both sides and perused records. I find that in this case, the appellants have discharged the service tax liability on 31st January, 2004 and on 4th February, 2004. They also discharged the interest liability calculated as their own from 30th November, 2003 till the payment of the service tax liability. Show cause notice was issued to the appellant subsequent to the payments made by them. This identical issue came up before this Tribunal in the case of Mount Shivalik Industries Ltd. (Supra) and in the case of Green Ply Industries Limited case in a Final Order No. 626/06, dated 22nd February, 2006, 2006 (4) S.T.R. 241 (Tribunal). In the case of Mount Shivalik Industries Limited, the Bench took a view which is as follows: A plain reading of Section 158 would reveal that provisions were inserted to Section 68, in order to bring the category of receiver of the services of G.T.O. as the person liable to pay service tax.
It can be seen that till this retrospective amendment the payment of service tax under Section 68 was to be made only by the service provider. After the retrospective amendment in Finance Act, 2003, the receiver of the services from G.T.O. was also made liable to pay service tax. Since the calculation of service tax liability would have been a bone of contention, the Finance Act, 2003, sought to insert a new Section 71A to make the receiver of services of G.T.O. to file returns. This insertion was necessitated as the provisions of Sections 69 and 70 of Finance Act, 1994 applied only to service provider. By inserting Section 71A, the Finance Act, 2003 made the service receivers to file return to the authorities to ascertain the service tax liability. The said Section 71A also granted time of six months from the date of assent of the bill by the President. The Finance Bill, 2003 received the assent of the President on 16-5-2003. This would imply that the service receivers were required to file the returns by 17-11-2003 and discharge their service tax liability. It can be seen that by bringing this Section 71A in the statute, the liability to discharge the service tax was extended up to 17-11-2003. In other words, if an assessee does not pay his service tax liability by 17-11-2003, the interest liability gets fastened on to the assessee till the payment of service tax.
6. From the above, it can be seen the interest liability has been correctly discharged by the appellant as is held by the Tribunal. The issue in this case is squarely covered by the decisions of the Tribunal. It is ordered that the appellant is liable to pay the interest for the period from 30th November, 2003 till the discharge of the service tax liability, which they have already done so. Hence, the appellant's appeal to this extent is disallowed and demand of interest from the period 13-5-2000 to 30-11-2003 is set aside.
7. As regards, the penalty imposed on the appellants, I find that in the case of Green Ply Industries Limited and Mount Shivalik Industries Ltd., the Tribunal took a view that no penalty was imposable once service tax liability and the interest thereon is already discharged by the appellant. Respectfully, following the said decision, I set aside the penalty imposed on the appellants.
8. Accordingly, the appeal is allowed, as indicated in the above paragraphs, with consequential relief, if any.