Service tax on courier agency services upheld, but time-barred demand set aside for notice issued beyond limitation period.

Service tax on courier agency services was upheld because the levy had already been decided in the assessee's own case and affirmed by the Supreme Court, so the merits were concluded against the assessee. A separate demand for the period ending March 2002 was set aside as time-barred because the show cause notice was issued beyond the one-year limitation under Section 73(1) of the Finance Act, 1994. The remaining demand was sustained, so the appeal succeeded only to the extent of the barred portion.

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Issues: (i) Whether service tax was leviable on courier agency services for the relevant period. (ii) Whether the demand raised by show cause notice beyond the statutory period of one year was barred by limitation.

Issue (i): Whether service tax was leviable on courier agency services for the relevant period.

Analysis: The levy on courier agency services had already been decided in the assessee's own case and the earlier decision had been affirmed by the Apex Court. The issue on merits therefore stood concluded against the assessee.

Conclusion: The levy of service tax on courier agency services was upheld and the issue was decided against the assessee.

Issue (ii): Whether the demand raised by show cause notice beyond the statutory period of one year was barred by limitation.

Analysis: Under Section 73(1) of the Finance Act, the demand had to be raised within one year. The show cause notice relating to the period ending March 2002 was issued on 16-6-2003, beyond the permissible period, and that portion of the demand was therefore time-barred.

Conclusion: The demand for the period ending March 2002 was barred by limitation and was set aside, while the remaining demand was sustained.

Final Conclusion: The appeal succeeded only to the extent of setting aside the time-barred portion of the demand and otherwise remained unsuccessful on merits.

Ratio Decidendi: A demand of service tax must be raised within the statutory limitation period prescribed by Section 73(1) of the Finance Act, 1994, and any demand issued beyond that period is barred by time.

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