2018 (2) TMI 1323 - AT - Service Tax

Court rules in favor of respondents, absolving liability for Service Tax & penalty.

Commissioner of Central Excise, Ahmedabad Versus M/s Nirma Ltd.

The High Court dismissed Revenue's appeal against the Commissioner's order setting aside the demand of Service Tax and penalty on services received from ... Goods Transport Operator Service - recipient of service - Revenue asked the respondent to pay Service Tax in respect of such services received vide leter dated 24.3.2003 pursuant to the amendment made by the Finance Bill, 2003 - Held that: - the identical matter was decided by the Hon'ble Gujarat High Court in the case of Eimco Elecon Ltd. [2010 (7) TMI 477 - GUJARAT HIGH COURT], where it was held that admittedly, the assessee could not be faulted with for not having filed a return after getting himself registered. More particularly, when one considers the language employed in the Proviso below sub-section (1) of Section 68 and the provisions of Section 71A of the Finance Act, 1994, it is not possible to state that the language of the Statute is so clear that any default can be fastened on the respondent-assessee - appeal dismissed - decided against Revenue. Issues:Appeal against demand of Service Tax and penalty on services received under Goods Transport Operator head.Analysis:The appeal was filed by Revenue challenging the Commissioner's order setting aside the demand of Service Tax and penalty on services received from transport operators. Revenue claimed that the respondents received transport services during a specific period and were asked to pay Service Tax post-amendment by the Finance Bill, 2003. However, respondents argued that the Finance Bill had not become an Act, and they had a stay from the Gujarat High Court regarding the payment. Despite repeated requests and show-cause notices, respondents did not pay the Service Tax or file returns until summoned in 2005. The High Court dismissed the respondents' petition, and subsequent show-cause notices were issued in 2006, leading to the current appeal. Revenue argued that the show-cause notice was issued after an amendment in 2004, distinguishing it from a previous case relied upon by the Commissioner.The Counsel for the respondent highlighted that the Commissioner's order relied on previous decisions, including one from the Tribunal in the respondent's case and a judgment from the Gujarat High Court, granting similar benefits in comparable circumstances. The Tribunal reviewed the submissions and noted that a similar matter was previously decided by the Gujarat High Court in favor of the assessee, emphasizing the amendments in the Finance Act and the liability of the service recipient. The Tribunal found no merit in Revenue's appeal based on the precedents and dismissed it accordingly.The Tribunal's decision was based on the observations made by the Gujarat High Court in a previous case, emphasizing the liability of the service recipient post-amendments in the Finance Act. The Tribunal noted that until specific amendments came into effect, the provisions of the Act could not be applied retrospectively, absolving the assessee from any fault in not filing returns or paying Service Tax. The Tribunal also referred to its own previous decision in the respondent's case, where it was concluded that the appellant was not obligated to discharge tax liability for availing services when the law did not require it. Relying on these precedents, the Tribunal found no merit in Revenue's appeal and dismissed it accordingly.