Full Judgment
2. The appellants had received Goods Transport Operator's service (GTO service, for short) during the period 16.11.1997 to 01.06.1998 but had not paid any service tax thereon under the Finance Act, 1994. The department issued a show-cause notice dated 14.02.2001 for recovery of service tax. The demand was contested on merits as well as on limitation.
The original authority dropped the demand. However, its decision was revised by the Commissioner who, vide the impugned order, demanded service tax of Rs. 21,350/- from the assessee under Section 73 read with Section 71A of the Finance Act, 1994 for the aforesaid period, with interest under Section 75 of the Act. The present appeal is directed against the Commissioner's order.
3. After hearing both sides and considering their submissions, I note that the revisional authority has not accepted the Hon'ble Supreme Court's decision in Commissioner of Central Excise, Meerut v. L.H.Sugar Factories Ltd. 2006 (187) E.L.T. 5 (S.C.) as final inasmuch as a subsequent appeal of the department against the Tribunal's decision in the case of Sundaram Fasteners Ltd. taking the same view as in L.H.Sugar Factories case (supra) was admitted by the apex court. This view of the Commissioner has been reitereated by learned SDR. On the other hand, learned Counsel submits that a similar revisional order of the Commissioner was set aside by the Tribunal in the case of Tamil Nadu Cements Corporation Ltd. v. Commissioner of Central Excise, Trichy 2007 (6) S.T.R. 320 (Tri.-Chennai). Paragraphs 4, 5 and 6 of the Tribunal's order in Tamil Nadu Cements Corporation's case are reproduced below: 4. During the period of dispute, Service tax was not recoverable on GTO service from a recipient thereof. In order to make recipients of GTO service liable to pay Service tax for that period, Parliament amended the relevant Rule under the Finance Act, 2000, which came into force on 12-5-2000. Later on, under the Finance Act, 2003, Section 71A was inserted in the Finance Act, 1994. This new provision cast a liability on recipients of GTO service to file returns. In the case of L.H. Sugar Factories Ltd., this Tribunal considered all these amendments and held that the class of persons who fell under Section 71A did not come within the purview of Section 73 and, therefore, SCN issued under Section 73 for recovery of Service tax from such persons were not maintainable. This view was upheld by the Supreme Court in CCE, Meerut v. L.H. Sugar Factories Ltd., 2006 (3) S.T.R. 715 (S.C.) : 2005 (187) E.L.T. 5 (S.C.). The SCN in the instant case was issued only on 3-4-2004 and the same was under Section 73 of the Finance Act, 1994. The amendment brought to the said Finance Act or the Rules framed thereunder did not have the effect of bringing assessees like the appellants within the fold of Section 73 as per the ruling of the Apex Court in L.H. Sugar Factories (supra). We have not found anything in the Apex Court's judgment in Gujarat Ambuja Cements (supra) as running counter to the view taken by the Court in L.H. Sugar Factories (supra).
5. Ld. SDR has submitted that, subsequent to the Apex Court's judgment in L.H. Sugar Factories (supra), the Commissioner of Central Excise, Chennai-III has filed an appeal in the Supreme Court against the Tribunal's decision in the case of Sundaram Fasteners Ltd. and that the said appeal stands admitted. In the circumstances, it is submitted, the view taken in L.H. Sugar Factories (supra) has not attained finality and the same need not be followed.
6. Ld. SDR has not claimed that, in the civil appeal filed by the Department in the case of Sundaram Fasteners Ltd., any stay of operation of the Tribunal's order has been obtained. In the circumstances, the resistance offered by him to the finality and binding effect of the Apex Court's judgment in L.H. Sugar Factories (supra) will be of no avail. We follow the ruling of the Apex Court rendered in L.H. Sugar Factories (supra) and set aside the impugned order. The appeal stands allowed.
Following the view taken above, I set aside the impugned order and allow this appeal.