COMMISSIONER OF CENTRAL EXCISE, VADODARA-1 versus M/S GUJARAT CARBON & INDUSTRIES LTD.

Citation: [2008] 12 S.C.R. 305 · Decided: 18-08-2008 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Dismissed
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Judgment (excerpt)

[2008] 12 S.C.R. 305 
>. ' 
COMMISSIONER OF CENTRAL EXCISE, VADODARA-1 
A 
v. 
MIS GUJARAT CARBON & INDUSTRIES LTD. 
(Civil Appeal No.1618 of 2005) 
AUGUST 
B 
18, 2008 
[DR. ARIJIT PASAYAT AND DR. MUKUNDAKAM 
SHARMA, JJ.] 
Service tax - Levy of, on service availers prior to 2003 - c 
Held: Rightly set aside by Tribunal - Finance Act, 1994 -
ss. 70, 73, 76, 77 and 81. 
· Respondents-assessees had availed the services of 
goods transport operators prior to the year 2003. The Com-
D 
missioner passed order demanding service tax from Re-
spondents on the gross transport charges paid by them 
to the transport operators. The Tribunal quashed the or-
der. Hence the present appeals. 
.Ii 
Dismissing the appeals, the Court 
E 
HELD: The Tribunal referred to a decision in the case 
of L.H. Sugar Factories Ltd. v. CCE, Meerut-11* where under 
similar circumstances the show cause notice was issued. 
It was held that during the relevant period Section 73 takes 
F 
in only the case of assessees who are liable to file return 
p~ 
under Section 70. The liability to file return is cast on the 
. assessees only under s.71-A which was introduced in the 
Finance Bill, 2003. Thus, during the period in question no 
notice could have been issued under Section 73 for non-
filing of return under s.70. According to the Tribunal, the G 
) 
service receiver was not required to file any return under 
s.70 of the Finance Act, 1994 prior to 2003. The Tribunal 
accordingly quashed the order demanding service tax 
from the respondents-service availers. In an identical cas~ 
305 
H 
306 
SUPREME COURT REPORTS 
[2008] 12 S.C.R. 
A 
in CCE, Meerut-11 v. L.H. Sugar Factories Ltd.**, this Court 
agreed with similar conclusions of the Tribunal and held 
that even the amended s.73 takes in only the case of 
assessees who are liable to file return under s.70. (Paras 
5, 6, 8] (309-8-D,F,G] 
B 
** Commissioner of Central Excise, Meerut-11 v. L.H. 
Sugar Factories Ltd. and Ors. (2005 (13) SCC 245 - relied 
on. 
* L.H. Sugar Factories Ltd. v. CCE, Meerut-11 (2004) 165 
c ELT 161 - referred to. 
D 
E 
F 
Laghu Udyog Bharti and Ors. v. Union of India, 1999 
(112) ELT 365 - cited. 
Case Law Reference 
(2004) 165 ELT 161 
referred to. 
(2005 (13) sec 245 
relied on 
Para 5 · 
Para a 
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 1618 
of 2005 
From the final Order No. A/909/WZB/2004/C-IV dated 271 
8/2004 of the Customs, Excise & Service Tax Appellate Tribu-
nal, West Zonal Bench, Mumbai in Appeal No. ST/101/2002-
MUM 
WITH 
C.A. Nos. 6424, 7144of2005, 1077, 1173, 3464of2006, 
3629, 3565, 3558, 3557, 3556, 3172 of2007 and 5131of2008. 
M. Chandrashekhar, S.P. Singh, Ashok Bhan, Shilinder 
G Saini, Alka Sharma, B.V. Balaram Das; P. Parmeswaran, B. 
Krishna Prasad, S. Nanda Kumar, Satish Kumar, G Ananda 
Selvam, S. Lakshmi, V.N. Raghupathy, Kavin Gulati, Gaurav 
Goel, Mahesh Agarwal, Rishi Agrawala, E.C. Agrawala, U.A. 
Rana, Abhishek K. Rao (for MIS. Gagrat & Co.), Sanjeev kumar 
H Singh, Ruby 'Singh Ahuja, Manu Aggarwal, Manik Karanjwala 
-
' 
( 
COMM. OF CENTRAL EXCISE, VADODARA-1 v. 
307 
M/S GUJARAT CARBON & INDU. LTD. 
>-
) 
and Senthil Jagadeesan for the appearing parties. 
A 
The Judgment of the Court was delivered by 
Dr. ARIJIT PASAYAT, J. 
Civil Appeal No. 5131/2008, D.No.10930/2006 
B 
1. Delay condoned. Appeal Admitted . 
.. 
" 
2. In these appeals common points are involved and 
therefore they are disposed of by this common judgment. 
3. Challenge in each -case is to the judgment of various c 
Benches of Customs, Excise & Service Tax Appellate Tribunal 
(in short 'CESTAT'). The respondents in each case had 
engaged the services of transport operators. They were in 
other words availers of service and not service providers. The 
Central Excise Authorities issued notice asking them to explain D 
as to why penalty should not be imposed upon them under the 
provisions of Sections 76 and 77 of Chapter V of the Finance 
Act, 1994 for alleged contravention of the provisions of 
Sections 70, 76 and 81 of the said Chapter and as to why 
interest should not be recovered from them for delayed 
E 
payment of service tax as provided under the aforesaid Act. 
Relying on a decision of this Court in Laghu Udyog Bharti & 
Ors. v. Union of India (1999 (112) ELT 365) the show cause 
notice was dropped. In the said case, it was held that service 
availers are not required to pay service tax under the provisions 
F 
of the Finance Act. In some cases the orders were reviewe
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