SECTION 65(50b) of Finance Act, 1994 – Transportation of Goods by Road Services:

Assessee, Nirma Ltd., had received Goods Transport Service. Department had issued show cause notice to him on 31-12-1998 and demanding Service Tax. But after the decision of Hon’ble Supreme Court in case of Laghu Udyog Bharti V. Union of India [2006] 4 STT 322, where in demand of Service Tax from recipient of service was declared ultra virus, said proceeding was dropped. After Finance Act, 2000, there was a revolution in provision to demand service tax from recipient. So the department had issued again a show cause notice to assessee on 09-02-2004 demanding service tax. The Tribunal held that since at relevant point of time when recipient was not required to discharge tax liability for availing GTA Service, question of filing of return did not arise. Therefore Section 73 could not be invoked against assessee to demand Service Tax.

Nirma Ltd. V. Commissioner of Central Excise, Indore – CESTAT, NEW DELHI BENCH [2012] 35 STT 211/20