TMI Blog2007 (5) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 75 of the Act. 2. The respondents are engaged in the manufacture of cement and were having registration for the purpose of service tax. The respondents received goods transport operators' services during the period 16-11-1997 to 2-6-1998. According to the Revenue, since the respondents were liable to pay service tax under the amended provisions of the proviso to Section 68(1) read with Section 71A of the Act, they were required to file return in form ST-3B along with copy of challan of payment of tax in form TR-6. The return was required to be filed for the services received during the period from 16-11-1997 to 2-6-1998 in the pre scribed form ST-3B on or before 13-11-2003. The respondents, however, submitted ST-3B return on 27-11-2003 for the services received during the said period without any payment of service tax and therefore, without the returns accompanying copy of TR-6 challan. The Revenue therefore, requested the assessees to pay service tax pointing out that Hon'ble the Supreme Court had rejected their application for stay/recovery of service tax on the GTO services received by them. The appellants deposited a part of the amount in these two cases, of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion which was tagged along with the petition of Gujarat Ambuja Cement Ltd. was dismissed by Hon'ble the Supreme Court. The writ petitioners were required to pay the service tax by the time extended by Hon'ble the Supreme Court as per the direction issued in Gujarat Ambuja Cement Ltd. (supra). In this context, the adjudicating authority held that the assessees, even after the order of Hon'ble the Supreme Court on 17-11-2003, did not deposit the service tax within two weeks from 17-11-2003. The adjudicating authority, therefore, held that since the writ petitions of the present assessees were also dismissed by the Supreme Court, there was no confusion of taxability of service tax on the recipients of GTO services. As noted above, after the decision of Hon'ble the Supreme Court dismissing the petitions of the present respondents, the remaining amounts of the tax were paid up on 13-2-2004 and 15-3-2005. The adjudicating authority, therefore, imposed a lenient penalty of the minimum prescribed under Section 76 of the Act. Since the returns in prescribed form ST-3B were filed by the assessees on 27-11-2003, which was within the time limit extended by Hon'ble the Supreme Court by its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and make any imposition of tax declared invalid, as valid, and that the reasoning of the adjudicating authority was not correct because in the said petitions, the Hon'ble the Supreme Court held that the legislature was competent to remove the infirmities retrospectively which was the only issue decided in that judgment and not the issue of validity of the show cause notices dated 26-4-2004 and 4-11-2004 issued by the department. It was held that the show cause notices were issued 26-4-2004 and in the show cause notices dated 4-11-2004 issued in lieu of the earlier show cause notices all the contents were the same except as regards the changes made in Section 73. The Commissioner (Appeals) accepted the plea of the respondents that under Section 73, there was a mention of sub section (1) of Section 70, which stipulated that, "it is a person responsible for collecting the service tax, who is to furnish the return". It was observed that under the rules, the person who was receiving the services could not be made responsible for filing the return and paying the tax in view of the decision of the Supreme Court in Laghu Udyog Bharati (supra). It was held that, no show cause notice cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents had paid up the service tax on their writ petitions being dismissed along with the writ petitions filed by Gujarat Ambuja Cement Ltd. He also pointed out that even the respondents-assessees had categorically stated that the last date of filing of returns was up to two weeks after 14-11-2003 and that the returns were filed by them on 27-11-2003 before the expiry of the extended period. He argued that the returns in the prescribed Form ST-3B read with Rule 7A were required to accompany challan in TR Form 6 to show that the tax was paid. He, therefore, submitted that the provisions of Section 71A read with Rule 7A clearly indicated the date when the tax was to be paid. Since the revised show cause notices were issued on 4-11-2004, they were within the period of one year from the relevant date and, therefore, the demands were not time-barred. He relied upon the decision of the Supreme Court in Gujarat Ambuja Cement Ltd. reported in 2006 (3) S.T.R. 608 (S.C.) = 2005 (182) E.L.T. 33 (S.C.), pointing out from Para 44 thereof that, even the petitions of the present respondents (writ petitions 466 and 467 of 2000) were dismissed. He further relied upon the decision of this Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said Rules, as it stood during the relevant period. He also submitted that return in Form ST-3B was not a periodic return and that the relevant date of payment of sales tax was 25th of the month immediately following the calendar month in which the value of taxable service is received, as per Rule 6 and, therefore, the demands were time-barred. He further argued that no recovery could be made from the receiver even though he may be liable by virtue of the validating law. He submitted that only the actions and proceedings initiated before the amendment of Finance Act, 2000 may be proceeded with and no fresh proceedings can be initiated under the validating provisions because, Section 117 protected and validated any action taken prior to the commencement of Finance Act, 2000, by taking into consideration the amendments, which were made by Section 116. He submitted that the opening part of Section 116 of the Finance Act, 2000, which amended Sections 65, 66 and 67, indicated that the provisions were applicable "during the period commencing on or before 16-11-1997 and ending with 16-10-1998" which showed that they should be read only during that, period and not thereafter. Simila ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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." "71A. Filing of return by certain customers. - Notwithstanding anything contained in the provisions of Sections 69 and 70, the provisions thereof shall not apply to a person referred to in the proviso to sub-section (1) of Section 68 for the filing of return in respect of service tax for the respective period and service specified therein and such person shall furnish return to the Central Excise Officer within six months from the day on which the Finance Bill, 2003 receives the assent of the President in the prescribed manner on the basis of the self-assessment of the service tax and the provisions of Section 71 shall apply accordingly." (emphasis added). "73. Recovery of service tax not levied or paid or short-levied or short- paid or erroneously refunded. - (1) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the service tax which has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso to be stated that the assessee had assessed and paid the service tax correctly in terms of the provisions of the Act and the Rules made thereunder. The contents of the said form clearly indicate that it required the tax to be paid with particulars of challans of payments to be shown therein. This form indicates that it was prescribed for a specific situation arising by virtue of the validating provisions that necessitated insertion of Rule 7A for filing of the returns by the recipient of services provided by goods transport operators for the specific period from 16th day of November 1997 to 2nd day of June 1998. The returns were to be furnished within a period of six months from 13-5-2003 in the said form, "along with copy of TR-6 in triplicate", which is a challan showing payment of tax. If the return was filed within the time prescribed, no interest or penalty was to be paid. Rule 7A was inserted in the context of Section 71A, which was inserted on or before 16-7-1997. The said provision of Section 71A reproduced hereinabove, inter alia, provided that any person referred to in the proviso to sub-section (1) of Section 68 shall furnish return within six months from the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 116, which inserted the said proviso in Section 68(1) and their petition along with writ petitions of Gujarat Ambuja Cement Ltd. having been dismissed by Hon'ble the Supreme Court, they were liable to pay service tax by the time extended by Hon'ble the Supreme Court as per the directions contained in the order, which was passed in a group of petitions including that of the present respondents. The contention that the service tax was payable by the respondent-assessees on 25th of the next calendar month as contemplated by Rule 6, which should be treated as the "relevant date", is, therefore, wholly misconceived and if accepted, will make the validating provisions redundant though upheld by Hon'ble the Apex Court. Rule 6 relating to payment of service tax on the value of taxable services received during any calendar month by 25th of the month immediately following the calendar month has obvious reference to the periodic returns and payment of tax contemplated by Section 70 read with Rule 7 and the prescribed Forms ST-3 and ST-3A. Sub-rule (5) of Rule 6 refers to Form ST-3A, and explanation to sub-rule (6) of Rule 6 refers to Form TR-6. In the very scheme of things, the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons 69 and 70, the provisions thereof shall not apply to a person referred to in the proviso to sub-section (1) of Section 68 for the filing of return in respect of service tax for the respective period and service specified therein, and such person shall furnish return in the prescribed manner on the basis of the self-assessment of the Service tax, and the provisions of Section 71 shall apply accordingly. Even in cases where returns were furnished under Section 70 they were required to be taken up for verification under Section 71. Under Section 72, which provided for best judgment assessment also, there was reference to both the returns filed under Section 70 as well as cases where any person having made a return failed to comply with the provisions of Section, as also the cases where the proper officer was not satisfied with the correctness or the completeness of the accounts of the assessee. Under Section 73(1)(a) as it existed at the relevant time, there was reference not only to return made under Section 70, but also to cases where the proper officer had reason to believe that by reason of omission or failure, on the part of the assessee, to disclose wholly or truly all mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be relevant for the purposes of construing the amended provisions. The Hon'ble the Supreme Court in the context of the provisions of Section 71A held as under :- '19. In addition, Section 71 which provides for the filing of returns was amended to provide, with retrospective effect, for the insertion of Section 71 A. Under the newly inserted section, the provisions of Sections 69 and 70 do not apply to a person referred to in the proviso to sub-section (1) of Section 68 as far as the filing of returns in respect of service tax for the period commencing from 16th July 1997 was concerned. It seeks to provide that 'such persons shall furnish return to the Central Excise Officer within six months from the day on which the Finance Bill, 2003 receives the assent of the President in the prescribed manner on the basis of the self-assessment of the service tax and the provisions of Section 71 shall apply accordingly'. This period was extended by this Court by order dated 17-11-2003 for a period of two weeks with effect from the date of the order. Section 94 as originally enacted for the rule making power of the Central Government was amended to read with effect from 16th July 1997, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Supreme Court in Laghu Udyog Bharati case (supra) and on the decision of this Tribunal in L.H. Sugar Factories Ltd. case (supra) in which relying upon, the decision in Laghu Udyog Bharati, it was held that the show cause notices issued in that case by invoking Section 73 of the goods were not maintainable, is misconceived, as their ratio will now be applicable and the matter has to be viewed in the context of the amended provisions, the constitutionality of which has been upheld by the Apex Court in Gujarat Ambuja Cement case (supra)". 6. The earlier position under which the recipient of service provided by goods transport operator could not have been liable was drastically altered by the amended provisions. By Section 116 of the Finance Act, 2000 it was provided that during the period commencing on and from 16th day of July 1997 and ending with the 16th day of October 1998, the provisions of Chapter V of Finance Act 1994 (i.e. relating to service tax) shall be deemed to have effect subject to the modifications made thereunder. Section 65 of the Finance Act, 1994 was modified by substituting clause (6) thereof, as a result of which definition of 'assessee' was alte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acquire any vested right from the earlier defect in the statute and cannot seek a wind fall from the legislatures' mistakes. The Parliament has enacted a valid law with retrospective effect and therefore the earlier judgments become irrelevant and the matter has to be viewed only in the context of the provisions now existing, which clearly provided for the liability of the appellant in respect of the services provided by the goods transport operators for which the appellant paid the freight and was deemed always to have been liable to pay service tax for the period in question from 16th July, 1997. The appellant was bound to file the returns as mandatorily required by Section 71A and accordingly the return was filed as per this machinery provision, with the payment of service tax as per the challan". 15.1 It was further held: "The service tax paid on the basis of self-assessment as per the statutory provision was a valid collection of tax by the government and therefore, it was in no way refundable to the appellant who was liable to pay the same under the amended provisions. The period for filing of the returns was provided in Section 71A, which was six months from the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra). In fact, there could be no conflict between the two decisions, which dealt with different situations, one dealing with challenge against a show cause notice in a situation prevailing before the validating law and the other dealing with the effect of the validating provisions. Therefore, even if the decision of the L.H. Sugar Factories Ltd. rendered by the Tribunal came to be affirmed later on, that is, after the decision in Gujarat Ambuja Cement Ltd., the subsequent decision was relevant only in the context of the law, as stood prior to the validating provisions, the constitutionality of which came to be upheld by the Hon'ble the Supreme Court in Gujarat Ambuja Cement Limited. For the same reason any contrary decision rendered by this Tribunal cannot be followed, because that would be defying the law laid down by the Hon'ble the Supreme Court in Gujarat Ambuja Cement Limited. 17. The contention that the notices were barred by limitation is wholly misconceived in view of the fact that the revised show cause notices were issued as per the amended provisions of Section 73 which came into force from 10-9-2004 within one year from the relevant date which was def ..... X X X X Extracts X X X X X X X X Extracts X X X X
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