Section 73 recovery cannot be used against section 71A assessees; the demand, interest and penalty were unsustainable.

The amended recovery mechanism in section 73 of the Finance Act, 1994 applies only to assessees required to file returns under section 70, and not to persons covered by section 71A for the relevant period. Where the assessee's filing obligation arose only under section 71A, a show cause notice issued under section 73 was not maintainable, so the demand for service tax, interest and penalty could not be sustained. The controlling principle is that the amended section 73 cannot be used to invoke recovery proceedings against section 71A assessees outside the scope of that statutory machinery.

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Issues: Whether the amended section 73 of the Finance Act, 1994 could be invoked to demand service tax, interest and penalty from a person covered by section 71A for the relevant period.

Analysis: The demand was founded on the amended section 73 of the Finance Act, 1994. The controlling interpretation had already been laid down in the Tribunal's earlier decision, affirmed in appeal, that the amended section 73 applies only to assessees who are required to file returns under section 70 of the Finance Act, 1994. Persons brought within section 71A are not within that recovery machinery for the relevant period. Since the appellant fell in the section 71A category, the show cause notice issued under section 73 was not maintainable.

Conclusion: The demand of service tax, interest and penalty under section 73 of the Finance Act, 1994 was not sustainable against the assessee.

Ratio Decidendi: Amended recovery provisions under section 73 of the Finance Act, 1994 cannot be used against assessees whose obligation to furnish returns arises only under section 71A, because section 73 applies to persons liable to file returns under section 70.

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