2014 (10) TMI 134 - AT - Service Tax

Service tax liability erased under Finance Act; judgment dismisses appeal and confirms legislative immunities.

The judgment by Justice G. Raghuram addressed the service tax liability of the Appellant under Section 78 of the Finance Act, 2007. The court found that ... Insurance service - Employees' State Insurance - Held that:- The Finance Act, 2014 (No.25 of 2014), received the assent of the President on 6.8.2014. This Act introduced Section 100 into the Finance Act 1994. This provision enjoins fortified by a non obstante provision qua provisions of Section 66 of the Act, as it stood prior to 1.7.2012, that no service tax shall be collected in respect of taxable services provided by the Employees’ State Insurance Corporation set up under the Employees' State Insurance Act, 1948, during the period prior to 1.7.2012 It is asserted on behalf of the appellant and conceded on behalf of Revenue that appellant falls within the ambit of the immunities enacted in Section 100 of the Act. As a consequence of this legislative intervention, the service tax liability of the appellant stands effaced. As a result, the impugned order has become inoperative and the appeal therefore is infructuous. Issues:Service tax liability of the Appellant under Section 78 of the Finance Act, 2007.Analysis:The judgment delivered by Justice G. Raghuram pertains to the Employees' State Insurance Corporation's appeal against the confirmation of service tax liability amounting to &8377; 1945,35,25,000/-, along with interest under Section 75 and penalty under Section 78 of the Finance Act, 2007. The impugned order found the Appellant to have provided 'insurance services' during the relevant period.The Finance Act, 2014 (No.25 of 2014) introduced Section 100 into the Finance Act 1994, which specifically addressed the issue at hand. This new provision, despite the existence of Section 66 of the Act prior to 1.7.2012, stated that no service tax shall be collected in relation to taxable services provided by the Employees' State Insurance Corporation established under the Employees' State Insurance Act, 1948, for the period before 1.7.2012.It was acknowledged by both the Appellant and the Revenue that the Appellant indeed fell within the immunities granted by Section 100 of the Act. Consequently, due to this legislative intervention, the service tax liability of the Appellant was deemed to be erased. Therefore, the impugned order was rendered ineffective, making the appeal itself moot. The judgment declared the appeal as disposed of, leading to the dismissal of all pending miscellaneous applications as they were no longer relevant in light of the decision.