1. The appellants in this appeal had received "Clearing & Forwarding Agents Service" during July'97 to March'98 but had not filed service tax returns or paid tax. A show-cause notice dated 11.3.99 was issued to them by the department demanding the tax for the above period and also proposing penalty on the noticee. The original authority, in adjudication of the said notice, confirmed demand of service tax of Rs. 2,10,902/- against the appellants and imposed on them a penalty of Rs. 2,31,902/-. In appeal, the Commissioner (Appeals) upheld the decision of the lower authority.
2. After hearing both sides and considering their submissions, I find that, in the same party's case relating to 'Goods Transport Operators Service' for the period 16.11.97 to 1.6.98, this Bench held in their favour in appeal No. S/121/2005 vide Final Order No. 1199 to 1237/2006 dt 1.12.2006. The ratio of the decision relating to GTO service is equally applicable to the present case relating to C&F service inasmuch as, in the case of L.H. Sugar Factories Ltd. v. CCF Meerut 2004 (165) ELT 191 (Tribunal) affirmed by the apex court in 2005 (187) ELT 5 (SC), which was followed in final order dt. 1.12.2006 ibid, the question whether service tax was leviable on C&F service for the aforesaid period had also been considered and decided in favour of the assessee.
For the sake of clarity, para-2 of final order dt. 1.12.2006 ibid is reproduced below: In these appeals, it is pointed out that, after the decision in L.H. Sugar Factories case, the Hon'ble Supreme Court has admitted civil appeals filed by CCE Vadadora-I and CCE Chennai-III in the cases of Gujarat Carbon and Industries and Sundaram Fasteners Ltd. respectively and that those civil appeals challenging the view taken in L.H. Sugar Factories case have been admitted by the court.
However, there is no claim that the operation of the orders passed by this Tribunal in the cases of Gujarat Carbon and Industries and Sundaram Fasteners Ltd. was stayed by the apex court. In these appeals, the appellants proceed to discuss the provisions of Sections 70, 71, 71A & 73 of the Finance Act, 1994. It is contended that "both the service provider filing return under Section 70 and the service recipient filing return under Section 71A are to converge necessarily at Section 71 for the purpose of verification".
It is contended that the service recipient, required to file self-assessed tax return under Section 71A, is also covered within the ambit of Section 73(1)(a). Accordingly, the appellants' case is that the subject SCNs were issued within the powers of the department under Section 73(1)(a) of the Finance Act, 1994. Ld.SDR has reiterated this case of the department. Ld.
counsels/consultants, opposing this plea, submit that the above contentions would not stand the test of the ruling given by the apex court in the case of L.H. Sugar Factories (supra). On a perusal of the apex court's judgment in L.H. Sugar Factories case, I find that the above legal proposition made by the appellants is not sustainable inasmuch as their lordships of the apex court rendered their ruling after considering the aforesaid provisions of the Finance Act, 1994 as amended.
3. In the result, the impugned order is set aside and this appeal is allowed with consequential relief.