9911796707
TMI Blog2006 (2) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of the taxable service was Rs. 8,48,53,724.66 on which the amount of service tax payable was Rs. 42,42,686/-, as stated in the return of Service tax in form ST-3B prescribed under Rule 7A of the said rules. An amount of Rs. 1,000/- was also paid on account of interest/fine/penalty payable on the said amount as mentioned in the said return filed by the appellant. The service tax was paid on 20-11-2003 on the basis of the self assessment. It was declared by the appellant that the particulars mentioned in the return were in accordance with the records and books maintained by the appellant and were correctly stated. It was also stated that the appellant had assessed and paid the service tax correctly in terms of the provisions of said Act and rules made thereunder. In the forwarding letter dated 20/24-11-2003 which is on record, it was stated by the appellant that the said amount was paid as service tax under protest, "with the right to seek refund of the same if at a later date the Apex Court holds it ultra vires and/or not payable". It was stated that the fresh returns were also filed with the requisite TR-6 challans evidencing payment of service tax on the freight amount paid d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 did not amend any of the provisions of recovery of service tax that was not deposited for the period from 16-11-1997 to 2-6-1998. Moreover, the appellant could not have foreseen that there would be a retrospective amendment, and that, by the time it was introduced more than six months had elapsed. The amendment without the machinery provisions of recovery could not empower the revenue authorities to recover service tax by resorting to the provisions of Section 73 of the Act. It was further contended that the amendment made by Section 158 of the Finance Act, 2003 inserting Section 71A and the prescribed return for the said period did not have the effect of validating any past action. It was further submitted that assuming machinery provisions had been made, service tax would have become payable latest by July 1998 for the period ending 2-6-1998 and therefore the right to demand such tax had lapsed since long. The amendment by Finance Act, 2000 should be construed so as to cover cases where notices of demand were already issued within the stipulated period of limitation. Relying upon the decision of the Tribunal in M/s. L.H. Sugar Factories Limited & Others v. CCE Meerut-II reporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plying the provisions of Section 71 to returns filed under Section 71A, persons who came under Section 71A were brought under the net of Section 73, The learned Assistant Commissioner, therefore, rejected the claim for refund. 2.3 The appellate Commissioner confirming the order-in-original held that the decision in L.H. Sugar Factories Ltd., was not applicable to the appellant's case since no notice was issued under Section 73 for recovery of tax and payments were made by the appellants on their own, in view of the amendments made by Finance Act, 2003 which required the returns to be filed in Form ST-3B within six months from 13-5-2003, since the tax was to be paid by the assessee in terms of the amendment made in the service tax provisions by Finance Act, 2003. The appellant was, therefore, not entitled to the refund, it was noted that the appellant's protest while paying the service tax was only on the ground that they would claim the refund if the Apex Court held the provisions inserted by the Finance Act, 2000 to be ultra vires. Arguments on behalf of the appellant : 3. It was contended by the learned Counsel appearing on behalf of the appellants that the amendmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; The decision of the Supreme Court in National Agricultural Cooperative Marketing Federation of India Ltd., and Another v. Union of India and Others reported In (2003) 5 SCC 23 was cited to point out that in the context of the amendment made in Income-tax Act, 1961 by Act 11 of 1999 the Supreme Court has held in paragraph 29 of the judgment that the said amendment cannot be construed as authorising the revenue authorities to reopen assessments already barred by limitation and that the amendment did not seek to touch on the periods of limitation provided in the Act. The Supreme Court observed that different considerations would arise if, by the amendment even final assessments were unambiguously sought to be opened, but that was not the case before it. (C) The decision of the Supreme court in Hyderabad Industries Ltd. and Another v. Union of India and Others reported in 1999 (108) E.L.T. 321 (S.C.) = (1999) 5 SCC 15 was cited with a view to point out that the Supreme court had referred to the notes to the clauses to the Customs Tariff Bill to find out the legislative intent of providing for a charging section in the Tariff Act. (D) & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 2000 the law covered each and every recipient of goods and transport operators services during 16-7-1997 to 16-10-1998. By Section 117 of the Finance Act, 2000, the law covered the assessees who were absolved by the Court from any liability to pay service tax as recipient by virtue of the rules having been held the ultra vires. He submitted that Section 71A was added by Finance Act, 2003 to enable the recipients of goods transport operators' services during the said period to file returns. It was argued that if the law intended only to cover those against whom action was already initiated then filing of returns was not required and there was no need to enact the recovery provision of Section 71A in the Act. By inserting the said machinery provision it was made clear that every person liable to pay the service tax in respect of the said period under the amended provisions shall file the return. It was submitted that persons like the appellant could not have filed the return under Section 70 and they are covered under Section 71A. As regards service tax having been paid "under protest" it was submitted that, Section 11B of the Central Excise Act only gave right to the assessee pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the filing of returns in respect of service tax for the period commencing from 16th July 1997 was concerned. The Supreme court in paragraph 22 of the judgment held that as it was apparent from Section 116 of the Finance Act, 2000, all material portions of the two Sections which were found to be incompatible with the Service Tax Rules were themselves amended so that now in the body of the Act by virtue of the amendment to the word "assessee" in Section 65(5) and the amendment to Section 66(3), the liability to pay the tax is not on the person providing the taxable service but, as far as the service provided by clearing and forwarding agents and goods transport operators are concerned, on the person who pays for the services. As far as Section 68(1A) is concerned, by virtue of proviso added in 2003, the persons availing of the services of goods transport operators or clearing and forwarding agents have explicitly been made liable to pay the service tax. The Supreme Court held in para 23 of the judgment that a legislature was competent to remove infirmities retrospectively and make any imposition of tax declared invalid, valid. It was held that the law must be taken as having always ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 not 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 altered so as to, inter alia, include in relation to services provided by a goods transport operator, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices provided to him, to the credit of the Central Government. It thus becomes evident by virtue, of the amendments in Sections 65 and 68 made by the Finance Acts of 2000 and 2003 that the appellant, who admittedly paid the freight for the transportation of goods during the said period to the goods transport operator for the said services, was deemed always to have been person liable to pay service tax. 8. The provisions of Section 71A which were inserted by the Finance Act 2003 retrospectively w.e.f. 16th July 1997 were enacted to enable such persons falling under the proviso of sub-section (1) of Section 68 like the appellant to file the returns in respect of service tax for the said period within six months from the day on which the Finance Act, 2003 received the assent of the President in the prescribed manner, on the basis of the self-assessment of the service tax, as provided therein. It was also provided in Section 71A that the provision of Section 71 shall apply accordingly, to such returns. Rule 7A thereupon came to be inserted by the Service Tax (Amendment) Rules, 2003 w.e.f. 14-5-2003 in which it was provided that, notwithstanding anything contained in Rule 7 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self-assessment basis and the validity of statements made thereunder had been vouchsafed in the returns. 9. 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 on which the Finance Act, 2003 received the assent of the President, and the appellant filed the return within the period so prescribed. In a case which was covered by Section 71A read with Rule 7A the date of filing of return cannot be drawn from the provisions of Section 70. In fact, Section 71A clearly specified that the provision of Section 70 did not apply to persons referred to in the proviso to sub-section (1) of Section 68 for the filing of return. It cannot, therefore, be accepted that the time limit for filing of return by the appellant should be computed on the basis of the provision of Sections 70 and 73 as from the date on which the half-yearly return could have been filed under Section 70 read with Rule 7 whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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