L.H. SUGAR FACTORIES LTD. Vs. CCE

JUDGEMENT

(1.) THESE appeals are directed against the common order passed by the Commissioner (Appeals) Customs & Central Excise, Meerut -II dated 22.5.2003. The Commissioner (Appeals) had dismissed the appeal filed by the assessee. Adjudicating authority had confirmed demand of service tax from the appellant on the ground that they had availed services of goods transport operators for transportation of raw material, packing materials. Capital goods and finished goods etc. during 16.11.97 to 1.6.98 and had not paid service tax @5% as required under chapter V of the Finance Act, 1994 as amended subsequently.

(2.) IT is admitted that all the appellants in the course of their business had utilized services of goods transport operators. As per provisions of Finance Act, 1944 and the rules made thereunder service provider was to collect and pay service tax. Service tax was liable to be paid on the services rendered by Clearing and Forwarding Agent and Goods Transport Operator with effect from 16.7.97 and 16.11.97 respectively. As per Service Tax Rules, 1994 every person who paid or was liable to pay for clearing and forwarding service either himself or through his agent was liable to pay service tax. So also every person who paid or was liable to pay freight or transportation charges either himself or through his agent for transportation of goods by road in a goods carriage was liable to pay service tax in respect of goods transport operators. In Laghu Udyog Bharti Vs. Union of India : (1999) 6 SCC 418 = 1998 (112) ELT 265 Hon'ble Supreme Court of India held that the provisions of Rule 2(d) (xii) and 2(d) (xvii) is so far as it made persons other than clearing and forwarding agents or person other than goods transport operators responsible for collecting service tax is ultra -vires the Finance Act, 1994.

(3.) SHOW cause notices were issued to the appellant on different dates in 2002 demanding service tax tax from them for the services received from goods transport operators. Show cause notice proposed to invoke extended period of limitation and there was also a proposal for imposition of penalty and demand of interest. In is the case of the appellants that no show cause notice could have been issued to them under Section 73 even after the amendment brought under Finance Act 2000.