TaxTMI 
TaxTMI 
2026 (5) TMI 511
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....7 to 16-98 under Section 73 (a) of the Finance Act 1994 (Act) along with applicable interest and proposing penalties under Section 76, 77 and 78 of the act for nonpayment of service tax and non-filing of returns. 4. The Appellant, in its reply dated 13-05-2002, inter-alia stated that there cannot be any omission or failure to make a return or disclose material facts, as during the relevant time there was no such requirement to do so. Further, it was contended that there appeared to be no specific provision requiring the service receivers of goods transport to deposit service tax in case they had failed to do so earlier during the period in question to which the retrospective effect of Section 116 applies. It was therefore contended that the demand raised in the SCN is barred by limitation as the period involved in the present case is from 16-07-1997 to 31-08-99 and the SCN has been issued on 11-04-2002, which is beyond the period of limitation. 5. However, consequent to the Finance Act, 2003, the Appellant vide its letter dated 10th November 2003 filed on 12th November 2003, referring to the SCN dated 11.04.2002, furnished the return mandated by Section 71A read with Rule 7A ....
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....rvice provided by goods transport operator for the period from 16th Day of November 1997 to 2nd day of June 1998 to furnish a return within a period of six months from the 13th May 2003 failing which the interest and penal consequences as provided in the Act shall follow, thereafter held vide the impugned order that the service tax paid on the basis of self-assessment as per the statutory provision was a valid collection of tax and went on to reject the Appeal preferred by the Appellant. Hence this Appeal. 9. Ms. Samyuktha Banusekar, Ld. Advocate appearing for the Appellant, made detailed submissions, taking us through the sequence of events leading upto the present Appeal. Ld. Counsel contended that the Appellant cannot be vexed with two SCNs for the same cause of action and when the prior SCN on the very same issue was issued, the second notice cannot be issued for the same dispute. Reliance was placed on the decision in M/s. Reliance Securities Ltd v Commissioner of CGST, Mumbai, 2024 (7) TMI 68, Anglo French Textiles v CESTAT, Chennai, 2018 (362) ELT 576 (Mad) and M/s. Veejay Enterprises v The Commissioner of Central Excise, Bangalore III, 2024 (7) TMI 616-CESTAT, Bangalore.....
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....ow contend that the demand of what was paid as confirmed, is untenable. It is argued that the Appeal be rejected as without merits. 14. We have heard the rival submissions, perused the appeal records and the citations submitted. 15. The sole issue that arises for our consideration is whether the confirmation of service tax demand made on the Appellant 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 demanded under SCN dated 08.11.2004, is tenable. 16. To appreciate the matter in its proper perspective, it is necessary to notice the changes in the levy of service tax on Goods Transport Operators over the years, and hence while noticing the contentions of the appellant in the narrative, these too are interspersed infra. 17. Section 88 of the Finance Act 1997 inter alia, provided for levy of service tax on the services rendered to goods transport operators which came into effect on 16-11-1997 vide Notification No.41/97-ST dated 05-11-97. However, vide Notification No.42/97-ST dated 05-1197, in relation to services provided by a goods transport operator, every person who pays or is liab....
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....ed. 21. Consequent to these amendments vide Finance Act 2000, when SCNs came to be issued, they were challenged by the assessees and one such challenge was pending before the Delhi Tribunal in the case of L.H. Sugar Factories. In the interregnum, Finance Act, 2003 brought in further amendments and by Section 158 of the Finance Act, 2003, subsection (1) of Section 68, Sections 71, 73 and 94 of the 1994 Act were further amended. In addition to this, Section 71A of the Act was inserted with retrospective effect from 16-7-1997. By clause (ii) to proviso to Section 68 (1), it was provided that in relation to services provided by goods transport operator, every person who pays or is liable to pay the freight either himself or through his agent for the transportation of goods by road in a goods carriage for the period commencing on and from the 16th day of November, 1997 and ending with the 2nd day of June, 1998,shall be deemed always to have been a person liable to pay Service Tax, for such services provided to him, to the credit of the Central Government. The newly inserted Section 71A provided that notwithstanding anything contained in the provisions of Sections 69 and 70, the provi....
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....xvii) had been held to be illegal in Laghu Udhyog Bharati only because the charging provisions of the Act provided otherwise. Now that the charging section itself has been amended so as to make the provisions of the Act and the Rules compatible, the criticism of the earlier law upheld by this Court can no longer be availed of. There is thus no question of the Finance Act, 2000 overruling the decision of this Court in Laghu Udhyog Bharati as the law itself has been changed. A legislature is competent to remove infirmities retrospectively and make any imposition of tax declared invalid, valid. This has been the uniform approach of this Court. Such exercise in validation must of course also be legislatively competent and legally sustainable. Those issues are considered separately. On the first question, we hold that the law must be taken as having always been as is now brought about by the Finance Act, 2000. The statutory foundation for the decision in Laghu Udhyog Bharati has been replaced and the decision has thereby ceased to be relevant for the purposes of construing the present provisions (vide Ujagar Prints v. Union of India). Therefore, subject to our decision on the question o....
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....turn mandated by Section 71A read with Rule 7A of the Service Tax Rules, 1994 in the prescribed Form No. ST-3B and also paid service tax of Rs.2,34, 325/- vide challan dated 10th November 2003. Thereafter, the Appellant was issued the SCN dated 08.11.2004 in which is the genesis of this Appeal inasmuch as pursuant to the Appellant's reply to the SCN, the demand stood confirmed by the adjudicating authority and upheld by the Appellate Authority in the impugned order. 27. The principal contention of the Ld. Counsel is that the second SCN dated 08-11-2004 could not have been issued as the earlier SCN dated 11-04-2002 is stated to have remained unadjudicated. It is also her contention without prejudice to the above that the Supreme Court ruling in L.H. Sugar Factories case upheld the position in law that the SCN issued under Section 73 is procedurally illegal and nonmaintainable against the service recipient for this specific period when it rejected the appeal against the decision of the Delhi bench of the Tribunal. The Tribunal had recognized that while the retrospective amendments vide Finance Acts 2000 & 2003, validated the tax levy by amending Section 68, they also created a sep....
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....to a customer of a 'Goods Transport Operator' in relation to 'carriage of goods' by road in a 'goods carriage', thereby bringing the included services also within the umbrella of 'Service Tax' liability, through the Judgements of the Apex Court in Laghu Udyog Bharati case, the decision of the Tribunal in L.H. Sugar Factories case as affirmed by the Apex Court, the amendments brought about by the Finance Act, 2003, the decision of the Apex Court in Gujarat Ambuja case, upto and including the substitution of Section 73 by the Finance Act, 2004; in paragraphs 6 to 26 of the said Judgement, and thereafter went on to hold as under: "27. To clarify further, Section 73A of the Act was introduced by Finance Act, 2006, with effect from 18-4-2006, to specify situations where Service Tax is payable by a person, and to provide for recovery procedure in respect of such amount due. In terms of sub-section (1) of Section 73A, any person who is liable to pay Service Tax and has collected any amount in excess of the Service Tax assessed or determined and paid on any taxable service from the recipient of taxable service, shall forthwith pay the amount so collected, to the credit of the Cent....
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....ion of Section 68 which was made on 14-5-2003. Thus, on a cumulative reading of Section 68, as amended, Section 71A, as inserted, and Sections 73 and 74 substituted, read with Rule 7A of the Service Tax Rules, 1994, it is evidently clear that such of those persons who have availed the service of Goods Transport Operators between the period from 16-11-1997 and 2-6-1998, were liable to file return and the period within which they had to file return was within a period of six months and the period was to commence from 14- 5-2003. The six months' period in such cases, comes to end on 13-11-2003. 29. We have noticed that the procedure to be followed is a self-assessment procedure, by which, the assessee is bound to pay service tax in terms of Rule 6(1), by the 6th day of the month, if the duty is deposited electronically and by the 5th day of the month, in any other case. In terms of Rule 7(1), every assessee shall submit a half-yearly return in Form ST-3 or ST- 3A, along with a copy of Form TR-6, in triplicate, for the months covered in the half-yearly return. Therefore, in cases where persons who have availed service of Goods Transport Operators during the said period, i.e., ....
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....M.A No. 1315 of 2009; on 8-52002 in C.M.A No. 1330 of 2009; on 8-5-2002 in C.M.A No. 1422 of 2009; on 8-3-2004 in C.M.A No. 3490 of 2009 and on 12-8-2002 in C.M.A No. 660 of 2010. Thus, the initial notices referred above were issued prior to the amendment of Section 73 of the Act. After the decision of the Honourable Apex Court holding that the unamended Section 73 of the Act would not cover the case of Section 71A of the Act, the Revenue had issued second notice under Section 73 of the Act, after its amendment, by reason of which alone, the Revenue was vested with the jurisdiction to pass orders of assessment on the return filed by the assessee." (emphasis supplied) 32. In our considered view, the contention of the Appellant as regards the tenability of two SCNs issued for the same cause of action and the contention that the SCN dated 08-11-2004 is time barred has been straight up answered by the Hon'ble High Court in its Judgement Supra as noted above, and are therefore liable to be rejected as misconceived. We also find that the contention of the Appellant that the said Notice dated 08-11-2004 has wrongly invoked the extended period of limitation under Section 73 of the Fi....
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....s is whether the appellant is entitled for refund of the service tax already paid. 10. It is seen that in the case of Gujarat Ambuja Cements Ltd. v. Union of India reported in 2006 (3) S.T.R. 608, the Supreme Court upheld the validity of the levy of service tax on users of services rendered by Goods Transport Operators. The Supreme Court, while dealing with the legislative competency of the levy of service tax on users of services rendered by goods transport operators, held as follows: "23. As we have said, Rule 2(1)(d) (xii) and (xvii) had been held to be illegal in Laghu Udhyog Bharati only because the charging provisions of the Act provided otherwise. Now that the charging section itself has been amended so as to make the provisions of the Act and the Rules compatible, the criticism of the earlier law upheld by this Court can no longer be availed of. There is thus no question of the Finance Act, 2000 overruling the decision of this Court in Laghu Udhyog Bharati as the law itself has been changed. A legislature is competent to remove infirmities retrospectively and make any imposition of tax declared invalid, valid. This has been the uniform approach of this Cou....