2017 (8) TMI 19 - AT - Service Tax

Tribunal rules in favor of appellant, no notice for non-filing return, historical context crucial

The Tribunal allowed the appeal, ruling in favor of the appellant. It held that during the relevant period, no notice could have been issued under Section ... Reverse charge - GTA Service - effect of retrospective amendment - Held that: - the issue is no more res-integra in view of the decision of the Tribunal in the case of Balasore Alloys Ltd. Vs. Commissioner of Central Excise, BBSR-I [2017 (6) TMI 861 - CESTAT KOLKATA], has held that during the period in question no notice could have been issued under Section 73 for non filing or the return under Section 70 as there was no requirement for filing of return by the service Recover. Hence, demand of interest and penalty cannot be sustained - appeal allowed - decided in favor of appellant. Issues:Demand of Service Tax on GTA service during a specific period - Liability to file return under Section 71A - Validity of Show Cause Notice under Section 73 - Applicability of interest and penalty - Interpretation of relevant legal provisions - Precedents set by earlier judgments.Analysis:The judgment dealt with the demand of Service Tax on GTA service during a specified period and the subsequent issues related to the liability to file a return under Section 71A, the validity of the Show Cause Notice under Section 73, the applicability of interest and penalty, interpretation of relevant legal provisions, and the precedents set by earlier judgments.The Tribunal referred to the decision in the case of Balasore Alloys Ltd. and highlighted the relevant portion of the decision which discussed the taxability of GTO service under reverse charge mechanism during the interim period from 16.11.1997 to 02.06.1998. It was noted that the recipient of service would be deemed to pay the tax during this period due to the provisions introduced by the Finance Act.Further, the Tribunal discussed the judgments in the cases of L.H. Sugar Factories Ltd., Commissioner of Central Excise, Baroda-I, and Gujrat Carbon & Industries Ltd. to establish that the liability to file a return was cast on the assessee only under Section 71A introduced in the Finance Bill, 2003. Therefore, during the relevant period, no notice could have been issued under Section 73 for non-filing of return under Section 70.In the present case, the appellant contested the demand of interest and penalty as they had already paid the tax. The Tribunal observed that since there was no requirement for the service receiver to file a return under Section 70 prior to 2003, the demand of interest and penalty could not be sustained. The judgment also discussed the decision of the Hon'ble Supreme Court in the case of Gujrat Ambuja Cements Ltd. to provide further context.Ultimately, the Tribunal allowed the appeal filed by the appellant based on the interpretation of the relevant legal provisions, precedents set by earlier judgments, and the specific circumstances of the case. The judgment emphasized the importance of understanding the legislative framework and historical context to determine the applicability of tax liabilities and penalties in a given situation.