Tribunal overturns duty demand and penalty in time-barred case, citing precedents

The Appellate Tribunal CESTAT AHMEDABAD allowed the appeal in favor of the appellants regarding the confirmation of duty demand and penalty under Goods Transport Agency services. The Tribunal held that the show cause notice issued in May 2007 for the period from November 1997 to June 1998 was time-barred as it exceeded the limitation period prescribed by law. Citing various precedents and emphasizing the importance of issuing notices within the statutory limitation period, the Tribunal ruled that the notice was invalid and, therefore, the appellants were not liable to pay the duty demand and penalty.

---

---

Appellants, manufacturers with GTA service registration, faced demand and equal penalty of Rs. 47,136 for alleged non-payment of service tax on goods transport operator services for period 16.11.1997-02.06.1998; show cause notice issued 11.05.2007. Appellants contended the notice is time-barred; reliance placed on the Larger Bench decision in CCE Meerut-II v. L.H. Sugar Factories Ltd. (2004) and several Tribunal precedents. The Tribunal held the issue is "no more res-integra" and followed prior decisions (including CCE Jaipur v. Milap Marbles; CCE Indore v. Kashyap Sweetners; Shah Alloys; Welspun Gujarat Stahl Rohren; Gujarat Flurochemicals) that notices must be issued within limitation as provided by the retrospective amendment, namely "required to be issued within limitation period as provided by retrospective amendment of law vide Section 117 of Finance Act, 2000." Applying that ratio, the notice dated 11.05.2007 was held barred by limitation and the appeal allowed with consequential relief.

---