ORDER
P.G. Chacko, Member (J)
1. After examining the records and hearing both sides, I am of the view that the appeal itself requires to be finally disposed of at this stage. Accordingly, after dispensing with predeposit, I take up the appeal.
2. The appellants had received Goods Transport Operator’s service during the period 16.11.1997 – 1.6.1998 but had not paid any service tax thereon under the Finance Act, 1994. They had not filed any service tax return either. The department issued a show-cause notice on 27.12.2000 for recovery of service tax of Rs. 1,26,663/- with interest, under Section 73 r/w Section 71A of the Finance Act for the above period. The original authority dropped the proceedings. The Commissioner in his revisional jurisdictional set aside the order of the original authority and demanded the above service tax from the assessee. Hence the present appeal of the assessee.
3. As rightly submitted by learned consultant for the assessee, the issue is already covered in their favour by the apex court’s decision in Commissioner of Central Excise, Meerut p- L.H. Sugar Factories Ltd. 2006 (3) STR 715 (SC) and a line of decisions of the Tribunal, one of which rendered by the South Zonal Bench is in the case of Tamilnadu Cements Corporation Ltd. v. Commissioner of Central Excise, Trichy 2007 (6) STR 320 (Tri. – Chennai).
4. The impugned order says that, after the case of L.H. Sugar Factories Ltd. (supra) was disposed of, the Hon’ble Supreme Court admitted the department’s civil appeal filed against the Tribunal’s decision in the case of M/s. Sundram Fasteners Ltd. , which decision was to the same effect as in L.H. Sugar Factories case (supra). Learned SDR has also highlighted this aspect. However, he has not claimed that, in the case of Sundram Fasteners Ltd., the apex court stayed the operation of the relevant decision of the Tribunal. A similar plea of the department was considered in the case of Tamilnadu Cements Corporation Ltd. (supra) also and the same was rejected on valid grounds. In fact, the rival contentions raised in the present appeal were also raised in the case of Tamilnadu Cements Corporation Ltd. (supra). Therefore, the present case can appropriately be disposed of by following the decision taken by the Division Bench in the case of Tamilnadu Cements Corporation Ltd. Paragraphs 2 to 6 of the order passed by the Division Bench are reproduced below:
2. The appellants had received “Goods Transport Operators, Service” during the period 16-11-97 to 2-6-98 but had not paid any Service tax thereon under the Finance Act, 1994. Later on, they paid an amount of Rs. 2,36,037/- towards such tax on 13-11-2003. This payment was under protest. The Department issued a show cause notice dated 3-4-2004 for recovering the balance amount of tax. The demand was contested. The Asst. Commissioner of Central Excise vacated the protest of the assessee, confirmed demand of tax of only Rs. 2,36,037/- and dropped the rest of the demand. His order was revised by the Commissioner under Section 84 of the Finance Act, 1994 and the demand of tax of Rs. 29,07,276/- was also confirmed against the assessee for the period 16-11-97 to 2-6-98 under Section 73(1)(b) of the above Finance Act. Hence the present appeal.
3. Ld. Counsel for the appellants submits that the question whether, on the facts of this case, Service tax is leviable on GTO service received by the appellants during the above period is already covered in their favour by a plethora of decisions of the Tribunal. Ld. Counsel has placed on record two recent decisions of the Tribunal viz. BPL Engineering Ltd. v. Commissioner of Service Tax, Bangalore 2006 (3) S.T.R. 747 (Tri.) : 2006 TIOL 1547 CESTAT-BANG and BPL Ltd. v. Commissioner of Customs & Central Excise, Cochin 2006 (4) S.T.R. 582 (Tri.) : 2006 TIOL 1611 CESTAT-BANG. Ld. SDR reiterates the findings of the Commissioner and also refers to the Supreme Court’s judgment in Gujarat Ambuja Cements Ltd. v. UOI . As rightly pointed out by ld. Counsel, we have since disposed of many similar cases. The decisions of the co-ordinate Bench, cited by ld. Counsel, are also in the same line.
4. During the period of dispute, Service tax was not recoverable on GTO service from a recipient thereof. In order to make recipients of GTO service liable to pay Service tax for that period, Parliament amended the relevant Rule under the Finance Act, 2000, which came into force on 12-5-2000. Later on, under the Finance Act, 2003, Section 71A was inserted in the Finance Act, 1994. This new provision cast a liability on recipients of GTO service to file returns. In the case of L.H. Sugar Factories Ltd., this Tribunal considered all these amendments and held that the class of persons who fell under Section 71A did not come within the purview of Section 73 and, therefore, SCN issued under Section 73 for recovery of Service tax from such persons were not maintainable. This view was upheld by the Supreme Court in CCE, Meerut v. L.H. Sugar Factories Ltd. 2006 (3) S.T.R. 715 (S.C.) : 2005 (187) E.L.T. 5 (S.C.). The SCN in the instant case was issued only on 3-4-2004 and the same was under Section 73 of the Finance Act, 1994. The amendment brought to the said Finance Act or the Rules framed thereunder did not have the effect of bringing assessees like the appellants within the fold of Section 73 as per the ruling of the Apex Court in L.H. Sugar Factories (supra). We have not found anything in the Apex Court’s judgment in Gujarat Ambuja Cements (supra) as running counter to the view taken by the Court in L.H. Sugar Factories (supra).
5. Ld. SDR has submitted that, subsequent to the Apex Court’s judgment in L.H. Sugar Factories (supra), the Commissioner of Central Excise, Chennai-III has filed an appeal in the Supreme Court against the Tribunal’s decision in the case of Sundaram Fasteners Ltd. and that the said appeal stands admitted. In the circumstances, it is submitted, the view taken in L.H. Sugar Factories (supra) has not attained finality and the same need not be followed.
6. Ld. SDR has not claimed that, in the civil appeal filed by the Department in the case of Sundaram Fasteners Ltd. , any stay of operation of the Tribunal’s order has been obtained. In the circumstances, the resistance offered by him to the finality and binding effect of the Apex Court’s judgment in L.H. Sugar Factories (supra) will be of no avail. We follow the ruling of the Apex Court rendered in L.H. Sugar Factories (supra) and set aside the impugned order. The appeal stands allowed.
Following the above decision, I set aside the impugned order and allow this appeal.
(Dictated and pronounced in open court)