2015 (2) TMI 524

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....8 and paid gross amount of Rs. 5,95,714/- as freight charges to the goods Transport Operators. The demand of Service Tax on this amount was confirmed as payable under Rule 2(1)(d)(xii) of the Service Tax Rules by invoking extended period under Section 73(1) of the Act. Initially the show-cause notice demanding duty was issued on 15.11.2002. But, the valuation of Service Tax under said Rule 2 (1)(d)(xii) was struck down as ultra vires by the Hon'ble Supreme Court in the case of Laghu Udyog Bharati vs. Union of India 1999 (112) E.L.T. 365 (SC). However, the levy of tax was re-validated in terms of Section 117 of the Finance Act, 2000 with retrospective from 16th July 1997. The Act received the assent of the President of India on 12.05.200....

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....otice was issued on 15.11.2002. 6. I have carefully considered the rival contentions. It will be useful to briefly go into the history of the levy of Service Tax on Goods Transport Operators. As mentioned in the facts in paragraphs above, the Rule 2(1) (d) (17) of the Service Tax Rules provided for demanding duty from service receivers. This was held to be ultra vires by the Hon'ble Supreme Court in the case of Laghu Udyog Bharati vs. Union of India - 1999 (112) ELT 365 (S.C). because the Act provided for demanding duty only from service providers. To rectify the situation, Section 117 of the Finance Act, 2000 made retrospective amendment to the law to validate the action taken under the said Rule and introduced Section 68 (1) to mak....

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....unsel for the petitioner would contend that as far as the second issue is concerned, the Supreme Court has in J.K. Cotton Spinning and Weaving Mills Ltd. and Another v. Union of India and Others, 1987 (32) E.L.T. 234 has held that even if a provision is amended with retrospective effect, the Department can proceed with the demand only if the matter was kept alive at the time when the original provisions was in force. Otherwise, no action can be initiated afresh after the amendment was introduced validating action taken under the provisions which were earlier struck down. The petitioner therefore would contend that insofar as the petitioner had not been served with any demand notice during the period between 16-7-1997 and 15-10-1998 and ther....

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....f the said section could not be made applicable despite retrospective amendment in Sections 68 and 71A of the Finance Act, 1994. In these circumstances, 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." Respectfully following these decisions, I hold that the demand raised vide show-cause notice dated 09.11.2004 is not maintainable. 6.2 A point was raised by the learned A....