Reverse charge service tax demand barred by limitation; deposit under protest held refundable with interest.

Service tax demand under reverse charge for goods transport operator services could not be sustained where the show cause notice was issued after the normal limitation period and the statutory conditions for invoking the extended period were not met. Retrospective validating provisions and later amendments did not cure a notice that was unsustainable on the date of issue. As the demand failed, the amount deposited under protest towards that demand had to be refunded with applicable interest. The impugned orders were therefore set aside and the assessee was held entitled to refund.

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Issues: (i) Whether the show cause notice for demanding service tax on goods transport operator services was valid and within limitation; (ii) Whether refund of the amount paid under protest was admissible.

Issue (i): Whether the show cause notice for demanding service tax on goods transport operator services was valid and within limitation.

Analysis: Liability on the service recipient under reverse charge for the disputed period stood covered by the legal position declared in the governing precedents, and the notice was issued after the normal period. The retrospective validating provisions and later amendment could not cure a notice that was not sustainable on the date of issue. The extended period of limitation was also unavailable in the absence of the statutory conditions for its invocation.

Conclusion: The show cause notice was not validly sustainable and was barred by limitation, in favour of the assessee.

Issue (ii): Whether refund of the amount paid under protest was admissible.

Analysis: Once the demand itself could not survive, the amount deposited under protest towards that demand could not be retained by the Revenue. The deposit, made pending adjudication, became refundable with applicable interest.

Conclusion: Refund was admissible in favour of the assessee.

Final Conclusion: The demand proceedings failed, the impugned orders were set aside, and the assessee was held entitled to refund of the amount deposited under protest with interest.

Ratio Decidendi: A service tax demand under reverse charge cannot survive where the notice is issued beyond the permissible limitation and the legal framework applicable on the date of notice does not authorize such recovery; any consequent deposit made under protest becomes refundable.

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