ORDER
R.K. Abichandani, J. (President)
1. All these appeals in which the appellants have sought interim stay are directed against the two orders of the Commissioner made on 26-10-2005 and by which the liability of the appellants-assessee to pay Service tax of the amounts mentioned against each of them in column No. 7 of the table contained in the paragraph 21 of the order, totalling to Rs. 26,55,637/- was confirmed and the liability of the appellants-assessees to pay Service tax of the amounts mentioned against their names in column No. 7 of the table in paragraph 19 of the other order of the Commissioner dated 16-11-2005, which was not paid by them.
2. The learned Authorised Representative appearing for all the applicants strongly contended that since there was no recovery machinery provided, no action arising out of the issuing show cause notices for the period in question could have been initiated by the Service tax authorities, under the provisions of Section 73 of Chapter 5 of the Finance Act, 1994. The learned authorised representative placed reliance on the decision of the Hon’ble Supreme Court in Commissioner of Central Excise, Meerut-II v. L.H. Sugar Factories Ltd. reported in 2006 (3) S.T.R. 715 (S.C.) : 2005 (187) E.L.T. 5 (S.C.), in which the Hon’ble Supreme Court agreed with the conclusion of the Tribunal to the effect that even the amended Section 73 takes in only the case of assessees who are liable to file return under Section 70, into consideration and the class of persons who come under Section 71 A, was not brought under the net of Section 73.
3. Under Section 71A, it was provided that notwithstanding anything contained in the provisions of Sections 69 and 70, the provisions thereof shall not apply to a person referred to in the proviso to Sub-section (1) of Section 68 for the filing of return in respect of service tax for the respective period and service specified therein, and such person shall furnish return in the prescribed manner on the basis of the self-assessment of the Service tax, and the provisions of Section 71 shall apply accordingly. Even in cases where returns were furnished under Section 70 they were required to be taken up for verification under Section 71. Under Section 72 which provided for best judgment assessment also, there was reference to both, the returns filed under Section 70 as well as cases where any person having made a return failed to comply with the provisions of Section 71, as also the cases where the proper officer was not satisfied with the correctness or the completeness of the accounts of the assessee. Under Section 73(1)(a) as it existed at the relevant time, there was reference not only to return made under Section 70, but also to cases where the proper officer had reason to believe that by reason of omission or failure on the part of the assessee, to disclose wholly or truly all material facts required for verification of the assessment under Section 71, the value of taxable service had escaped assessment or had been under-assessed, the requisite show cause notice would be issued. If action of recovery was not contemplated in accordance with Section 73, there was no sense in invoking the provisions of Section 71 in Section 71A. The interpretation of these provisions in the context of the decision relied upon by the learned Counsel had come up for consideration before the Hon’ble Supreme Court in Gujarat Ambuja Cements Ltd. v. Union of India , in which Hon’ble Supreme Court held that the law must be taken as having always been as was now brought about by the Finance Act, 2000 and that the statutory foundation for the decision in Laghu Udyog Bharati – was replaced and the decision had thereby ceased to be relevant for the purposes of construing the provisions of the Act as amended by the Finance Act, 2000. Therefore, reliance placed on behalf of the appellant in earlier decision of the Hon’ble Supreme Court in Laghu Udyog Bharti and the decision of the Tribunal in L.H. Sugar Factories Ltd. case in which the ratio of the Laghu Udyog Bharati was followed is misplaced.
4. Similar issue had arisen before the Tribunal in Service Tax Appeal No. 72 of 2005 decided by the Division Bench on 6-2-2006 wherein, in the context of provision of Sections 70 and 73, it was, inter alia, held as under:
5. It is a settled legal position that a statutory Act may be enacted prospec-tively or retrospectively. The retrospective effect can be given in case of curative and validating statutes. The curative statutes by their very nature are intended to operate upon and affect past transactions having regard to the fact that they operate on conditions already existing See, ITW Signode India Ltd. v. Collector of Central Excise . In the present case, as already held by Hon’ble Supreme Court in Gujarat Ambuja Cements Ltd., (supra), the law must be taken as having always been as was brought out by Finance Act, 2000 and that the statutory foundation for the decision of the Supreme Court in Laghu Udyog Bharati has been replaced and that decision has ceased to be relevant for the pur- poses of construing the provisions of the Act as amended by the Finance Act, 2000 and 2003. Therefore, the reliance on behalf of the appellant on the earlier decision of the Supreme Court in Laghu Udyog Bharati case (supra) and on the decision of this Tribunal in 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 Act 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).
5. The applicant has, therefore, not made out any prima facie case for waiver of the pre-deposit or penalty. All these applications are, therefore, rejected. It would be open for the applicants to deposit the respective amounts payable by them under the impugned orders within six weeks from today, failing which the appeal of the defaulting appellant shall stand dismissed. Post all the matters for reporting compliance on 30-10-2006. All these applications stand disposed of accordingly.
[Dictated and pronounced in the open Court on 5-9-2006]