ST-3 return filing applies only to persons liable for service tax; late fee or penalty cannot survive otherwise.

The obligation to file ST-3 returns under the service tax regime applies only to a person liable to pay service tax for the relevant period. Where the assessee had not rendered taxable services and was not liable to service tax, the return-filing requirement could not be invoked, and late fee or penalty for non-filing could not be sustained. The reliance on a later-withdrawn circular did not alter this position. The levy of late fee or penalty was therefore set aside in favour of the assessee.

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Issues: Whether the assessee, not being liable to pay service tax during the relevant period, could be subjected to late fee or penalty for non-filing of ST-3 returns.

Analysis: Section 70(1) of the Finance Act, 1994 requires filing of returns by a person liable to pay service tax, and the definition of assessee under Section 65 ties the obligation to tax liability. On the admitted facts, the appellant had not rendered taxable services during the relevant period and was therefore not liable to pay service tax. In that situation, the return-filing obligation and the consequential levy of late fee or penalty could not be sustained. The orders below had relied on a circular that had later been withdrawn and did not address the true issue of liability.

Conclusion: The levy of Rs. 70,000 as late fee or penalty was unsustainable and the appeal succeeded in favour of the assessee.

Ratio Decidendi: The obligation to furnish ST-3 returns and the power to impose late fee or penalty under the service tax regime apply only to a person who is actually liable to pay service tax during the relevant period.

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