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M/s Seksaria Biswan Sugar Factory Ltd Versus Commissioner of Central Excise, Lucknow

2015 (12) TMI 1404 - CESTAT ALLAHABAD

Demand of service tax - Goods Transport Operator service - Notification Nos, 42/97-ST & 43/97-ST both dated 05.11.1997 read with Rule 2 (c) (d) of Service Tax Rules, 1994 - Held that:- Issue is squarely covered by the earlier ruling of this Tribunal in the cases of L.H. Sugar Factories Ltd. (2005 (7) TMI 106 - SUPREME COURT OF INDIA) &. Hi-Tech Carbon (2004 (8) TMI 7 - CESTAT (NEW DELHI)). Accordingly, the impugned order is set aside - Appellant, has pointed out that the total demand of ₹ .....

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Vaish, CA For the Respondent : Shri Dipak Kumar, AC (DR) ORDER Per Anil Choudhary The Appellant, M/s Seksaria Biswan Sugar Factory Ltd., is in Appeal against Order-in-Appeal No.75-ST/LKO/2009 dated 18.03.2009 passed by Commissioner of Central Excise (Appeals), Lucknow, by which the Appellants, who are the receiver of the goods under "Goods Transport Operator" (GTO) services, have been fastened with the liability of service tax being receiver of services. 2.1 Before entering into the fa .....

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pays or is liable to pay freight either himself or through his agent for the transportation of goods by road. By Notification No.43/97-ST dated 05.11.1997; the term "person" defined is a factory, company or corporation etc. Thereafter, levy in respect of GTO services was withdrawn by Notification No.49/98-ST dated 02.06.1998 by exempting the service from taxation. The Appellant relied upon a decision of the Hon'ble Supreme Court in the case of Laghu Udyog Bharati Vs. Union of Indi .....

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e case of clearing and forwarding agents, rendered to his client and in the case of goods transporter is rendered to its customer. The "person responsible for collecting the service tax" referred to in Section 66 has to be read with Section 65 (28) which defines this expression to mean the person who is required to collect the service tax or to pay the same. It is clear from the reading of these provisions that according to the Finance Act, the charge of tax is on the person who is res .....

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o R of sub-clause (41) of Section 65, Section 68(1A) provides that the service tax for such service shall be collected from such person and in such manner as may be prescribed and to such person all the provisions shall apply as if he is the person responsible for collecting the service tax in relation to such service. As we read Section 68, it does not in any way seek to alter or change the charge of service tax levied under Section 66, which is on the person responsible for collecting the serv .....

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A) cannot be so interpreted as to make a person, as an assessee even though he may not be responsible for collecting the service tax, The service tax is levied by reason of the services which are offered. The imposition is on the person rendering the service. Of course, it may be an indirect tax, it may be possible that the same is passed on to the customer but as far as the levy and assessment is concerned, it is the person rendering the service who alone can be regarded as an assessee and not .....

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in sub-rules (i) to (xi) and (xiii) of Rule 2 (d), the definition of "the person responsible" is in consonance with the definition of that expression occurring in Section 65 of the Act. However, with regard to the services rendered by clearing and forwarding agents and the goods transport operator the definitions contained in Rules 2 (d)(xii) and (xvii), which seeks to make the customers or the clients as the assessee, is clearly in conflict with Sections 65 and 66 of the Act. 11. Sect .....

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(1) Every person responsible for collecting the service tax shall furnish or cause to be furnished to the Central Excise Officer in the prescribed form and verified in the prescribed manner, a quarterly return, within fifteen days of the end of the preceding quarter, showing - (a) the aggregate of payments received in respect of the value of taxable services ; (b) the amount of service tax collected ; (c) the amount of service tax paid to the credit of the Central Government ; and (d) such othe .....

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ribed form and verified in the prescribed manner setting forth the prescribed particulars. (3) Any person responsible for collecting the service tax who has not furnished the return within the time allowed under subsection (1) or sub-section (2) or having furnished a return under sub-section (1) or sub-section (2), discovers any omission or wrong statement therein, may furnish a return or a revised return, as the case may be, at any time before the assessment is made. 71. Assessment.- (1) For th .....

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further accounts or documents or other evidence as he may require. (2) The Central Excise Officer, after considering such accounts, documents or other evidence, if any, as he has obtained under sub-section (1) and after taking into account any relevant material, which he has gathered, shall by an order in writing, assess the value of taxable service and the amount of service tax payable on the basis of such assessment.' 12. These sections clearly show that the return which has to be filed p .....

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le for filing the return and payment of tax. Such a position is certainly not contemplated by the Act. 13...................................................................................... 14. We have no hesitation in holding that the provisions of Rule 2 (d)(xii) and (xvii), in so far as It makes persons other than the clearing and forwarding agents or the persons other than the goods transport operator as being responsible for collecting the service tax, are ultra vires the Act itself. The .....

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also considered by the Hon'ble Bombay High Court (affirmed by the Apex Court) in the case of Indian National Shipowners Association Vs. Union of India - 2009-TIOL-129-SC-ST wherein it has been held that the service tax under reverse charge, cannot be imposed prior to 18.04.2006, when Section 66A was brought on Statute. The said ruling was also upheld by the Hon'ble Supreme Court. 2.4 By the Finance Act, 2000, Section 116 was amended during the period commencing from 16th July, 1997 and e .....

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to the effect that notwithstanding any order from any Court/Tribunal, sub-clauses (xii) and (xvii) of Clause (d) of sub-rule (1) of Rule 2 of the Service Tax Rules, 1994 as it stood immediately before the commencement of the Service Tax (Amendment) Rules, 1998, shall be deemed to be valid and have always been valid as if the said sub-clauses had been in force at all material times. Thus, these amendments were sought to nullify the effect of ruling of the Hon'ble Supreme Court in the case of .....

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sport services (on reverse charge basis). The ld.Counsel further pointed out that this Tribunal under similar circumstances, in the case of M/s L. H. Sugar Factories Ltd. Vs. Commissioner of Central Excise, Meerut II reported in 2004 (165) ELT 161 (Tri.-Del.), where the inputs were sugar and the Appellants in the course of business, availed services of GTO for transportation of goods and the service tax was not collected w.e.f. 16.11.1997 to 01.06.1998. This Tribunal following the ruling of the .....

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ce Act, 1994 as it stood on the date of issue of SCN. He further urged that even by amendment in Section 73, amended by the Finance Act, 2000, an assessee can only file return under Section 70. Admittedly no liability is passed on the assessee under Section 71 of the Finance Act as the receiver of services and the notice under Section 73 is wholly without jurisdiction. The said ruling of the Tribunal, have been upheld by the Hon'ble Supreme Court in the case of Commissioner of Central Excise .....

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