TaxTMI 
TaxTMI 
2026 (3) TMI 1315
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.... operators which came into effect on 16-11-1997 vide Notification No.41/97-ST dated 05-11-97. The levy was subsequently withdrawn vide Notification No.49/98 - ST dated 02-06-98. Hence, service tax was payable on the services provided by GTOs during the period from 16-11-97 to 01-06-98. As per clause (d) of Sub Rule (1) of Rule 2 Service Tax Rules 1994 (as it stood prior to 16-10-98), in relation to services provided by the goods transport operator, the responsibility of payment of service tax shall be with every person who pays or is liable to pay the freight either himself or through his agent for transportation of goods by road in a goods carriage. As per Notification No.43/97 - ST dated 05-11-97, service tax on goods transport operator service shall be payable only by 8 categories of persons, which includes a company established under the Companies Act, 1956. 3. The appellant was issued a Show Cause Notice (SCN) dated 22-032002 proposing to demand service tax on the value of the taxable services rendered to the appellant by the goods transport operators during the period from 16-11-97 to 1-6-98 under Section 73 (a) of the Finance Act 1994 (Act) along with applicable interest ....
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....I versus LH Sugar Factories Limited, 2006 (3), STR-715 (SC). 6. Ld. Counsel submitted that the appellant's case mirrors the L.H. Sugar Factories dispute because both involve the demand for Service Tax on freight paid to Goods Transport Operators (GTOs) covering the identical period of November 1997 to June 1998. Both cases concern the liability of the service recipient as the "deemed assessee under the reverse charge mechanism. Crucially, the Department in both cases-initiated recovery action by issuing a SCN under Section 73 of the Act, utilizing the extended period of limitation. 7. Ld. Counsel argues that the Supreme Court ruling established a clear legal principle that the SCN issued under Section 73 is procedurally illegal and non-maintainable against the service recipient for this specific period. The Court recognized that while the retrospective amendments (Finance Acts 2000 & 2003, validated the tax levy (by amending Section 68), they also created a separate, special obligation for the recipient to file a return under Section 71A. Section 73, however, was framed to address failure to file under the general Section 70 (the service provider's obligation). Since the ....
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....een made in the instant case. In this case a show cause notice was issued to the respondent therein on 22-11-2002 for recovery of the Service Tax and penalties, similar to the Notice issued to the appellant herein dated 22.03.2002. In the said decision, the Tribunal had; after examining the statutory provisions and discussing the Apex Court decisions in Commissioner of Central Excise, Meerut -II versus LH Sugar Factories Limited, 2006 (3), STR-715 (SC) and Gujarat Ambuja Cements Ltd vs UOI, 2006 (182) ELT 33 (SC); dismissed the Revenue's Appeal challenging the order of the Commissioner (Appeals) made on 30-12-2004 setting aside the order-in-original by which demand of Service Tax recoverable on the amount paid by the assessee to the Goods Transport Operators during the period from 16-11-1997 to 1-6-1998 was confirmed and recovery of interest was ordered. Relevant portions of the said decision is reproduced below: "8. The Hon'ble Supreme Court in Gujarat Ambuja Cements Ltd. v. Union of India (supra), has settled the controversy with regard to the liability of the recipient of GTO's. Service for the period in question, in the context of the provisions of Section 71 and 71A a....
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....ed under Rule 7, was rejected on the ground that those provisions of Section 70 and Rule 7 were wholly inapplicable in cases where the provisions of Section 71A applied. 8.1 Under Rule 7A, which was inserted from 14-5-2003, it was provided that notwithstanding anything contained in Rule 7, which related to half-yearly returns, an assessee, in cases of service provided by the goods transporter for the period-in question, shall furnish a return within a period of six months from 13-5-2003 in Form ST-3B along with a copy of Form TR-6 in triplicate, failing which the interest and penal consequences as provided in the Act were to follow. It is obvious from this provision that even though the liability of the receiver of GTO services remained alive by virtue of the validating provisions for the period-in-question (16-11-1997 to 1-6-1998), the return was required to be filed within the period of six months from 13th May, 2003 in the prescribed form ST-3B and since the time was extended by the Hon'ble Supreme Court, it had to be filed by 30th November, 2003, in view of the directions contained in the decision in Gujarat Ambuja Cements Ltd. v. Union of India (supra). Thus on the es....
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....he context of the extended date for filing of the returns and payment of service tax. Without issuance of a show cause notice under Section 73 read with Section 71A in which it would be alleged that the tax was not paid and returns not filed by the extended date, it would have been impossible for the Revenue to have undertaken the proceedings of the nature contemplated by Section 73 of the Act for the recovery of the Tax that had escaped assessment in respect of the returns which were not filed. The show cause notice dated 29-11-2002 was wholly inadequate and inapplicable to the contingency that arose by virtue of the extended time limit for filing of the returns and payments of service tax by the extended date. Perhaps the Revenue ought to have been more vigilant by revising their notices which were earlier issued, to bring them in tune with the new provisions and the new situation that enabled the assessee to file a return and pay tax by 13-11-2003 under the law and by 30-11-2003 under the time extended by the Hon'ble Supreme Court. The requirement of issuance of show cause notice under Section 73 read with Section 71A cannot be diluted by applying "no prejudice" rule, because, p....
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....ght the denial of which was found to be correct on the fact circumstances therein namely that the appellant had paid the service tax and the levy was found to be tenable in the light of the decision of the Apex Court in Gujarat Ambuja Cements case. As regards the reliance placed by the Ld. A.R on the decision of the jurisdictional High Court in CCE, Puducherry v. CESTAT, Chennai, we find that as the tabulation in para 31 of the said decision shows Revenue had issued protective show cause notices within the period of one year from the date when the service tax was payable along with the return on or before 13-11-2003, that is between 13-11-2003 and 12-11-2004. In fact, the preceding paragraph 30 and the succeeding paragraph 32 of the said decision makes it clear and is reproduced below: "30. Now the question to be considered is as to whether the show cause notices issued to the respondents, seeking to recover Service Tax under Section 73(1A) of the Finance Act, 1994, as amended with effect from 10-9-2004, for failure to pay Service Tax and file return as required by the proviso to Section 68(1) and 71A of the Finance Act, 1994, read with Rule 7A of the Service Tax Rules, 19....