CCE Vs. SREE VAIDVAMBIGAI TEXTILE MILLS

JUDGEMENT

(1.) THESE appeals of the Revenue are against a common order of the Commissioner (Appeals). In Appeal Nos. 76, 78 and 79, there is no representation for the respondents despite notice. In appeal No. 81, Shri Section Renganathan, Advocate has requested for adjournment of hearing. But this request of the Advocate cannot be acceded to as he has not filed vakalat for the party. In the remaining appeals, the respondents are represented by their Consultants. Shri C. Mani, JDR appears for the appellant (Revenue) in all the appeals.

(2.) THE common issue involved in these appeals is whether the respondents were liable to pay service tax on 'goods transport service' received by them during the period 16.11.1997 to 1.6.1998 as demanded by the department in show -cause notices issued after 12.5.2000 (the date on which the Finance Act, 2000 received Presidential asset). This issue is no longer res integra. It has been held consistently in a line of cases that any demand of service tax on goods transport service raised in a show -cause notice issued after 12.5.2000, for the period 16.11.1997 to 1.6.1998, is not sustainable. One of such instances is Final Order No. 930 -931/2004 dated 20.10.2004 of this Bench. Paragraphs 5 and 6 of the said Final Order contain the ratio of the decision and are extracted below. 5. I have carefully considered the submissions. The assessees in both the appeals are recipients of taxable services, namely 'Clearing and Forwarding' service and 'Goods Transport' service. In respect of both these services, rules had been framed by Central Government to recover Service Tax from the recipients of service. But these rules were held to be ultra vires, Section 65 and 66 of the Finance Act, 1994 by the Hon'ble Supreme Court in the case of Laghu Udyog Bharati (supra). In order to get over the Supreme Court's ruling, Parliament amended Section 65 ibid in relation to the limited period 16.7.1997 to 16.10.1998 under Section 116 of the Finance Act, 2000, whereby recipients of 'Goods Transport' service and 'Clearing and Forwarding' service were defined as "assessees". Further for the aforesaid limited period, Parliament declared that "any action taken or anything done or purported to have been (I) taken or done at any time during the period commencing on and from the 16th day of July 1997 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" vide Section 117 of the Finance Act, 2000. Later on, the Finance Act, 2003, made certain amendments to the Service Tax provisions of the Finance Act, 1994, whereby the aforesaid assessees were required to present Tax Returns to the proper officer within six months from 15.5.2003 (date on which the Finance Act, 2003 received Presidential assent). Ld. Counsel has also invited my attention to the legal opinion given by the Additional Legal Advisor to the Government of India. This opinion is to the effect that Service Tax could not be recovered from the aforementioned service received for the period covered by the amendment where no action was initiated against them for such recovery during such period. 6. In the instant case, the demands of Service Tax were raised beyond 12.5.2000 in show -cause notices dated 13.5.2002 and 14.5.2003. Such demands are not affected by the amendments made to Section 65 by Parliament under Section 116 of the Finance Act, 2000 and consequently they are hit by the Apex Court's ruling in Laghu Udyog Bharati (supra). Furthermore, undisputedly, the demands raised by the Department, in these cases, are far beyond the period of limitation prescribed under Section 73 of the Finance Act, 1994. A similar view was taken in the case of Gujarat Carbon & Industries Ltd. v. CCE, Vadodara cited by Id. Consultants.

(3.) FOLLOWING the above decisions, I uphold the impugned order vacating demands of service tax on 'goods transport service' received by the respondents during the aforesaid period, and reject these appeals. It appears from the impugned order that, in respect of M/s. Fenner (India) Ltd., Madurai (Respondents in Appeal No. 80/2004) and M/s. Kothari Phytochemicals International Ltd. (respondents in Appeal No. 81/2004), the Commissioner (Appeals) rejected refund claims for service tax already paid for the aforesaid period. But this part of the impugned cannot be disturbed as it has not been challenged by the assessees.