ORDER
S.S. Kang, Vice-President
1. Heard both sides.
2. The respondents filed Cross-objection with the application for condoning the delay of 30 days in filing the Cross-objection. The contention of the respondents is that on receipt of the goods in respect of the appeal filed by the Revenue, the respondents collected the necessary paper and after consulting the Counsel, filed the Cross-objection and in this process the Cross-objections were filed on 30-2-2005. The contention of the respondents is also that the law settled by the Tribunal is in their favour. In these circumstances, reasons explained in the application to delay in filing the appeal is condoned.
3. In this case the Revenue filed the appeal where the order-in-appeal whereby the penalty imposed on the respondents is reduced to Rs. 1 lakh. The contention of the revenue is that the penalty should be imposed at the rate of Rs. 100/- per day for filing the return of service tax late in view of the provisions of Section 76 of Finance Act, 2000. The contention of the respondents is that Cross-objection is that the show cause was issued on 29-1-2002 in pursuance to the revalidation of the Clause of Finance Act, 2000. The contention is that the re-validation was in respect of the demand already raised or in respect of the refund claim sanctioned to the assessee. The appellants relied upon the decision of the Tribunal in the case of
L.H. Sugar Factories Ltd. v. Commissioner of Central Excise, Meerut-II, whereby the demand of service tax raised after revalidation Act set aside.
4. The contention of the Revenue is that Tribunal in the case of Gee Kay Enterprises v. Commissioner of Central Excise. Bangalore-I, reported in 2004 (171) E.L.T. 487 (Tri. – Bang.) held that the Cross-objection cannot be filed by the assessee against the portion of the order on which Department not aggrieved.
I find that the provision of under Section 35B Sub-section (4) of the Central Excise Act, 1944, provides that the memorandum of Cross-objection shall be disposed of by the Appellate Tribunal, as if, the appeal presented within time. Further, I find that Hon’ble Madras High Court in the case of Income-Tax Officer, Assessment II Calicut
and Anr. v. Fagoomal Lakshmi Chand and Anr. held that Cross-objection are to be treated as a separate appeal and are to be disposed of independently. In these circumstances, I find no merit in the contention of the Revenue that assessee cannot file Cross-objection against the portion not challenged by the Revenue.
5. In this case admittedly, a show cause notice was issued in the year 2002. The Tribunal in the case of
L.H. Sugar Factories Ltd. v. Commissioner of Central Excise, Meerut-II (Supra) held as under:
In view of the above, the appellants are fully justified in contending that no show cause notice could have been issued against them under Section 73 as it stood on the date of issue of show cause notice. But the appeals cannot be closed on the above basis in view of subsequent amendment brought under the Finance Act, 2003 with retrospective effect. These provisions will have effect for period from 16-7-1997 to 16-10-1998. Following are the relevant amendments. Section 69 as amended reads as follows:
Section 68. – (1) Every person providing taxable service tax at the rate specified in Section 66 in such manner and within such period as may be prescribed.:
Provided that:
(i) in relation to services provided by a clearing and forwarding agent, every person who engages a clearing and forwarding agent and by whom remuneration or commission (by whatever name called) is paid for such services to the said agent for the period commencing on and from the 16th day of July, 1997 and ending with the 16th day of October, 1998; or
(ii) 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 to be a person liable to pay service tax, for such services provided to him, to the credit of the Central Government.
6. In view of the above decision of the Tribunal, I find merit in the arguments of the appellant that the demand in respect of service tax is not sustainable and set aside. The Cross-objection filed by the appellants is allowed, demand and penalty are also set aside. As the demand is set aside, therefore, Revenue appeal has become infructuous. The appeal is dismissed as such.