Pre-amendment show cause notice under Section 73 could not sustain service tax liability under Section 71A.

A show cause notice issued under Section 73 of the Finance Act, 1994 before the 10.09.2004 amendment could not sustain a service tax demand relating to liability under Section 71A. The earlier Supreme Court principle applied was that persons covered by Section 71A were not within the scope of Section 73 as it then stood, so notices invoking Section 73 for such liability were not maintainable. Later Revenue decisions were distinguished because they concerned notices issued after the amendment. On that basis, the pre-amendment notice dated 22.04.2004 was held incapable of supporting the demand.

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Issues: Whether a show cause notice issued under Section 73 of the Finance Act, 1994 before the amendment of 10.09.2004 could sustain a demand in respect of liability arising under Section 71A.

Analysis: The demand related to service tax on clearing and forwarding services for an earlier period, while the notice itself was issued before Section 73 was amended to incorporate Section 71A violations. The earlier Supreme Court decision had held that the class of persons governed by Section 71A was not brought within the net of Section 73 as it then stood, and therefore notices invoking Section 73 for such liability were not maintainable. The Tribunal found the later decisions cited by the Revenue inapplicable because they involved notices issued after the amendment. Following the same principle, the Tribunal held that the notice dated 22.04.2004 could not sustain the demand.

Conclusion: The show cause notice issued before the amendment of Section 73 was not maintainable for enforcing liability under Section 71A, and the demand failed.

Ratio Decidendi: A demand for service tax liability under Section 71A cannot be sustained through a notice issued under Section 73 of the Finance Act, 1994 before Section 73 was amended to include such liability.

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