CESTAT, BANGALORE BENCH
Commissioner of Service Tax
Goetze TP (India) Ltd.
FINAL ORDER NO. 502 OF 2011
APPEAL NO. ST/142 of 2006
AUGUST 12, 2011
B.S.V. Murthy, Technical Member – Proceedings were initiated against M/s. Goetze TP (India) Ltd. (assessee for short) for recovery of Service Tax of Rs. 4,96,356/- (Rupees four lakhs ninety six thousand three hundred and fifty six only) on the ground that they were liable to pay Service Tax on Clearing and Forwarding services received by them during the period from 16.07.1997 to 31.08.1999 by issue of show cause notice on 22.04.2004. In the impugned order, the Commissioner (Appeals) has taken a view that the demand is not sustainable since the show cause notice was issued under Section 73 of Finance Act, 1994 and on the day on which show cause notice was issued, the Section 73 was not applicable in respect of short levy arising in respect of the ST – 3 returns filed under Section 71A. He relied upon the decision of the Tribunal in the case of LH Sugars Factories Ltd. v. CCE  8 STT 295 (New Delhi – CESTAT) Revenue is in appeal against this decision.
2. Learned DR on behalf of Revenue submitted that the decision of the Tribunal was confirmed by the Hon’ble Supreme Court but it was a short order. Subsequently the matter was argued at length before the Apex Court in the case of Chief CCE v. Sundaram Fasteners Ltd. [CA No. D-15409 of 2005, dated 28.11.2005] and after hearing the learned ASG, appeal has been admitted. Further Section 73 was amended to Incorporate Section 71A on 10.09.2004.
3. Learned counsel on behalf of the respondents would submit that the decision of the Hon’ble Supreme Court in the case of CCE v. L.H. Sugar Factories Ltd.  2 STT 282 applies to the facts of this case and the decision of the Tribunal in the case of CCE v. Mangalam Cement Ltd.  10 STT 203 (New Delhi – CESTAT) therein is not applicable to the facts of this case since show cause notice, in that case was issued after the amendment of Section 73.
4. We have considered the submissions made by both the sides. The issue is whether, show cause notice issued in April 2004 can be sustained or not. (Admittedly Section 73 was amended on 10.09.2004 and incorporated Section 71A. The decisions in the case of Mangalam Cement Ltd. (supra) and the Larger Bench decision in the case of Aqauta Sugar & Chemicals v. CCE  29 STT 60 (New Delhi – CESTAT) are not applicable to the facts of this case since in both those cases show cause notices were issued after the amendment of Section 73 of Finance Act, 1994 on 10.09.2004. Further the Hon’ble Supreme Court in the case of L.H. Sugar Factories Ltd. (supra) had made this observation which is reproduced below:
“Learned counsel for the parties have drawn our notice to the relevant provisions of the Finance Act as it stood in the year 1994 and thereafter as it stood after the various amendments to the Act in subsequent years. Having considered the relevant provisions of the Act, the Tribunal has, inter alia, recorded the following conclusion.
‘The above would show that even the amended Section 73 taken in only the case of assessees who are liable to file return under Section 70. Admittedly, the liability to file return is case on the appellants only under Section 71A. The class of persons who come under Section 71A is not brought under the net of Section 73. The above being the position show cause notices issued to the appellants invoking Section 73 are not maintainable.’
We entirely agree with the conclusion arrived at by the Tribunal. We find no merit in these appeals and the same are accordingly dismissed. No order as to costs.”
5. Moreover the very same issue had come up before the Tribunal in the case of Samruddhi Cement Ltd. v. CCE [Order No. ST/220 of 2011, dated 20-5-2011] has considered the issue. In that case also the show cause notice was issued on 19.05.2004. The observations of the Tribunal which are relevant and which are applicable to the facts of this case are reproduced below:
“We find that the appellant has been issued with a show cause notice on 19.05.2004 for the demand of Service Tax liability for the period 16.11.1997 to 2.6.1998 on the ground that the appellant has received the services of goods transport agency/operator which is liable to pay service tax as per the retrospective amendment and has not filed returns and discharged Service Tax.
On perusal of the show cause notice, we find that the show cause notice has been issued under section 73 of the Act for demand of service tax and consequent for the penalties and interest.
We find that the argument of the learned counsel that the issue is now squarely covered by the decision of the Hon’ble Supreme Court in the case of L.H. Sugar Factory Ltd. and Gujarat Carbon Industries Ltd. is correct. Retrospective amendment which was carried out, directed the recipient of the service of goods transport agency, to file a return under section 71A. Failure to do so was incorporated under the provisions of section 73 for demand of short levy and non-levy of service tax from 10.09.2004. This identical question was raised before the Supreme Court in both the cases as cited. Hon’ble Supreme Court has clearly held that if provisions of section 71A are not incorporated under section 73, no demand can be raised for the violation of the same, the liability does not arise and demands cannot be sustained. We find that the provisions of Section 73 of the Finance Act, 1994 were amended from 10.09.2004 by incorporating violation of Section 71A, for issuance of show cause notice. In the case in hand, it is seen that show cause notice has been issued on 19.05.2004, i.e., prior to amendment of Section 73.
In view of the foregoing judicial pronouncements, in the facts and circumstances of this case, we hold that the impugned order is not sustainable and is liable to be set aside and we do so.”
6. Respectfully following the precedent decision discussed above, we find that appeal filed by the revenue is devoid of merits and accordingly, we reject the same.