Narang Plastics Pvt. Ltd. Vs. the Commissioner of Central - Court Judgment

Excerpt:

.....that in the present case a show cause notice has been issued after the retrospective amendment and hence the proceedings are not justified.learned dr reiterated the departmental contentions.3. we have carefully considered the submissions. in terms of large number of judgments including the judgment cited by the counsel and that of apex court rendered in the case of lh sugar factories ltd., (supra), the demands are not recoverable, if the show cause notice has been issued after the retrospective amendment brought out by the finance act. the show cause notice in the present case has been issued in 2005 after the retrospective amendment for recovering service tax for the period 16.7.1997 to 31.8.99. for this reason the demands are not sustainable. respectively following the ratio of the cited judgments, the impugned order is set aside and appeal allowed.(operative portion of the order already pronounced in open court on conclusion of the hearing)

Judgment:

1. This appeal arises from OIA No 34/07 CE dated 27.2.07 by which the Commissioner (Appeals) has upheld the OIO No 27/06 dated 23.6.06 passed by the Assistant Commissioner confirming service tax on the commission paid by the assessee for availing services of M/s T.S. Narang & Company and M/s S. Tarachand & company during the period 16.7.1997 to 31.8.99 under the category of Clearing and Forwarding Agents. During the relevant period, service tax was not leviable under this category. By amendment to the relevant provisions, service tax was brought into effect with retrospective; effect. However in the present case, the show cause notice has been issued in 2005 after the amendment was brought and therefore the contention of the assesee is that the show cause notice is not sustainable as it has not been issued before the amendment. It is the submission of the appellant that this issue is already decided in large number of judgments including the ruling of the Apex court in the case CCE Meerut v. LH Sugar Factories Ltd. 2006 (3) STR 715 (SC). It is his submission that the Tribunal in the case of Bharat Fritz Werner Ltd., v. Dy CCE Bangalore 2007 (5) STR 218 (Tri-Bang) following the ratio of earlier judgments, has clearly held that the show cause notice ought to have been issued before the amendment and before the period in question.

2. Learned Counsel files list of judgments and contend that In the present case a show cause notice has been issued after the retrospective amendment and hence the proceedings are not justified.

Learned DR reiterated the departmental contentions.

3. We have carefully considered the submissions. In terms of large number of judgments including the judgment cited by the counsel and that of Apex court rendered in the case of LH Sugar Factories Ltd., (supra), the demands are not recoverable, if the show cause notice has been issued after the retrospective amendment brought out by the Finance Act. The show cause notice in the present case has been issued in 2005 after the retrospective amendment for recovering service tax for the period 16.7.1997 to 31.8.99. For this reason the demands are not sustainable. Respectively following the ratio of the cited judgments, the impugned order is set aside and appeal allowed.

(Operative portion of the Order already pronounced in open court on conclusion of the hearing)