2008 (2) TMI 238 - AT - Service Tax

Appellate Tribunal upholds service tax demand for goods transport service; clarifies key Finance Act amendments.

The Appellate Tribunal CESTAT, Kolkata, upheld the demand for service tax, interest, and penalties under Sections 68, 75, 76, and 77 for goods transport ... GTO service - Section 73 was substituted w.e.f. September10, 2004 - amended Sec. 73 only covers the case of assessees who were liable to file return u/s 70 - It didn’t apply to customer of goods transport operator for whom provision for filing return was made vide Section 71A – Assessee has liability of filing return u/s 71A, so he was not brought under net of sec. 73 – Even if SCN is taken to be issued u/s 73 as it stood in December 2001, or even prior to Sept. 10, 2004, it is not sustainable Issues:1. Demand for service tax, interest, and penalties under Sections 68, 75, 76, and 77 for goods transport service received.2. Applicability of amendments in the Finance Acts of 1997, 1998, 2000, and 2003 on the levy of service tax on goods transport service.3. Validity of show cause notice issued under Section 68 for recovery of service tax.4. Interpretation of Sections 73, 70, and 71A in relation to filing returns and liability for service tax.5. Comparison of judgments in similar cases regarding the sustainability of demands for service tax, interest, and penalties.Analysis:1. The case involved a demand for service tax, interest, and penalties under Sections 68, 75, 76, and 77 for goods transport service received. The original notice proposed recovery of service tax, interest, and penalties for non-payment and non-filing of returns. The Joint Commissioner confirmed the demand, interest, and penalties, which were subsequently challenged by the appellant.2. The case delved into the applicability of various amendments in the Finance Acts of 1997, 1998, 2000, and 2003 concerning the levy of service tax on goods transport service. The amendments introduced changes in the provisions related to the collection of service tax from customers of goods transport operators and the filing of returns by such customers.3. The validity of the show cause notice issued under Section 68 for the recovery of service tax was questioned by the respondent. The argument centered around the provisions of Section 68 not being intended for recovery in case of non-payment, leading to a debate on the correct legal basis for issuing such notices.4. The interpretation of Sections 73, 70, and 71A in relation to filing returns and the liability for service tax was a crucial aspect of the case. The respondent argued that Section 73, prior to its amendment in 2004, did not apply to customers of goods transport operators for whom specific provisions were made under Section 71A and Rule 7A.5. The judgment referenced previous cases, particularly the Tribunal's decision in L.H. Sugar, to analyze the sustainability of demands for service tax, interest, and penalties. The Tribunal's decision, upheld by the Supreme Court in similar cases, influenced the final ruling in the present case, leading to the dismissal of the appeal and a call for appropriate steps by the government in light of the legal precedents cited.This detailed analysis of the judgment highlights the key issues addressed, legal arguments presented, and the ultimate decision rendered by the Appellate Tribunal CESTAT, Kolkata, providing a comprehensive understanding of the case.