APOLLO TYRES LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) M /s. Apollo Tyres Ltd. have filed the present appeal against the Order No. D/STC/Revision/Commr./463/2002, dated 1 -2 -2002, passed by the Commissioner, Central Excise, in exercise of powers conferred under Section 84 of the Finance Act, 1994, setting aside the Adjudication Order No. 44/2000, dated 16 -2 -2000 passed by the Deputy Commissioner with the direction to pass fresh order.

(2.) BRIEFLY stated the facts are that a Service Tax was imposed on services provided by a goods transport operator in relation to carriage of goods. Rule 2(1)(d)(xvii) of Service Tax Rules was amended to provide that the Service Tax would be paid by the person availing of such service with effect from 16 -11 -1997. As the Appellants neither paid the Service Tax nor submitted the prescribed ST -3 Return, a show cause notice dated 18 -2 -99 was issued to them which was dropped by the Deputy Commissioner on the ground that the Supreme Court in the case of Laghu Udyog Bharti v. UOI - 1999 (112) E.L.T. 365 (S.C.) had held that provisions of Rule 2(d)(xvii) was ultra vires to the Act. Section 116 of the Finance Act, 2000 provided that notwithstanding anything contained in any judgment or order, sub -clauses (xii) and (xvii) of clause (d) of sub -rule (1) of Rule 2 of the Service Tax Rules, 1994 shall be deemed to be valid and to have always been valid as if the said sub -clauses had been in force at all material time and accordingly any action taken or anything done or purported to have been taken or done at any time during the period from 16 -7 -97 and ending with the day, the Finance Act, 2000 receives the assent of the President shall be deemed to be valid and always to have been valid for all purposes, as validly and effectively taken or done. A notice dated 14 -5 -2001 was issued to the Appellants proposing to revise the Adjudication Order dated 16 -2 -2000 passed by the Deputy Commissioner. The Commissioner, under the impugned order, set aside the said order dated 16 -2 -2000 and directed the Deputy Commissioner to pass fresh order after ascertaining the outcome of the petition filed by M/s. Apollo Tyres Ltd. in Hon'ble Kerala High Court, on the ground that Section 117 of the Finance Act has revalidated the levy retrospectively. Hence the appeal.

(3.) THE learned Advocate contended that the decision in TISCO case is squarely applicable as no Saving Clause has been provided in the Validation provision in Section 117 of the Finance Act; that Validation provisions only affects the refund of Service Tax which had been levied and collected; that this is evident from the fact that there is no provision in Section 117 for recovering the Service Tax. The learned Advocate also mentioned that review done under Section 84 of the Finance Act, 1994 is wrong; that show cause notice setting out the reasons for review should have been issued; that the letter dated 14 -5 -2001 does not indicate the basis or any reason to justify for its issuance nor any grounds has been spelt out for revision; that it has been held by the Calcutta High Court in the case of Electro House v. C.I.T., West Bengal II, 1968 (70) ITR 421 that a notice must state grounds on which the revision is being made. The learned Advocate contended that mere reference to a Section does not constitute giving of grounds for issue of notice. He finally submitted that Section 73 of the Finance Act, 1994 has not been given retrospective effect by Validation provisions and as such the demand is barred by limitation as there was no failure on the part of the Appellants to make a return under Section 70 of the Finance Act, 1994; that accordingly notice can be issued for six months only and as in the present matter show cause notice has been issued on 18 -12 -99 for the period from 16 -11 -1997 to 1 -6 -1994, it is time barred.