ORDER
P.G. Chacko, Member (J)
1. This application filed by the Commissioner of Central Excise, Salem is for stay of operation of the impugned order passed by the Commissioner (Appeals), Salem.
2. After examining the records, we find that the ld. Appellate Commissioner vacated a demand of Service Tax as also penalties on the facts of the case before him, in view of the Hon’ble Apex Court’s judgment in CCE, Meerut II v. L.H. Sugar Factories Ltd. and Ors. 2006 (3) S.T.R. 715 (S.C.). The original authority had confirmed the demand of tax against the assessee under Section 73(l)(a) of the Finance Act, 1994 and imposed penalties on them under Sections 76 to 78 of the Act. The demand of tax was for the period 16-7-97 to 22-8-99 and the same is in adjudication of a Show-cause Notice issued on 9-1-03 under Section 73 of the Finance Act, 1994. The tax was demanded on the service rendered to the assessee by Clearing and Forwarding Agents. On these facts, the demand was rightly set aside by the Appellate Commissioner and, consequentially, the penalties were rightly vacated. In the present application, ld. Commissioner of Central Excise analyses the Apex Court’s judgment in L.H. Sugar Factories (supra), traverses the provisions of Finance Act, 1994, the Finance Act, 2000, and the Finance Act, 2003 and concludes thus:
…as the legislative intention to safeguard the service tax which has escaped recovery for the period from 16-7-97 to 31-8-99 by a series of validation made to the provisions of the Finance Act, 1994 with retrospective effect, has been rendered null and void by the above decision of the Apex Court [L.H. Sugar Factory (supra)] riddled with an inharmonious construction diametrically opposite to the legislative intention, the compliance with the axiomatic principles of judicial discipline did not arise in the instant case. Consequently, Commissioner (Appeals) ought not to have placed reliance on the decision of the Hon’ble Supreme Court….
Ld. Commissioner accordingly prays for stay of operation of the impugned order. As, on our part, in keeping with judicial discipline, we respect the judgment of the Apex Court, we dismiss this application.
(Order dictated and pronounced in open court)