Mrs. K.K. Usha, President.- These appeals are directed against the common order passed by the Commissioner (Appeals) Customs & Central Excise, Meerut-II dated 22-5-2003. The Commissioner (Appeals) had dismissed the appeals filed by the assessees. Adjudicating authority had confirmed demand of service tax from the appellant on the ground that they had availed services of goods transport operators for transportation of raw material, packing materials. Capital goods and finished goods etc., during 16-11-1997 to 1-6-1998 and had not paid service tax @5% as required under Chapter V of the Finance Act, 1994 as amended subsequently.

2. It is admitted that all the appellants in the course of their business had utilized services of goods transport operators. As per provisions of Finance Act, 1994 and the rules made thereunder service provider was to collect and pay service tax. Service tax was liable to be paid on the services rendered by Clearing and Forwarding Agent and Goods Transport Operator with effect from 16-7-1997 and 16-11-97 respectively. As per Service Tax Rules, 1994 every person who paid or was liable to pay for clearing and forwarding service either himself or through his agent was liable to pay service tax. So also every person who paid or was liable to pay freight or transportation charges either himself or through his agent for transportation of goods by road in a goods carriage was liable to pay service tax in respect of goods transport operators. In Laghu Udyog Bharati v. Union of India [1999] 33 RLT 911 (SC) = [1999] 6 SCC 418 Hon’ble Supreme Court of India held that the provisions of Rule 2(d)(xii) and 2(d)(xvii) insofar as it made persons other than clearing and forwarding agents or persons other than goods transport operators responsible for collecting service tax is ultra vires the Finance Act, 1994.

3. Finance Act, 2000 made amendments to the relevant provisions with retrospective effect. Amendment sought to validate levy and collection of service tax for the period between 16-7-97 to 12-5-2000 in respect of services of goods transport operators and clearing and forwarding agents. The amendment also sought to deny refund of service tax to users and also for recovery of refund already granted consequent to the judgment of the Supreme Court in Laghu Udyog Bharati’s case (supra). Provisions of section 115 of the Finance Act, 2000 was made retrospective from 16-7-97. Thus, Service Tax became payable on services rendered by clearing and forwarding agent with effect from 16-7-97 but in the case of service tax with respect to goods transport operators it became payable only from 16-11-97 in view of Notification No. 41/97-ST, dated 5-11-97. Subsequently by Notification No. 49/98, dated 2-6-98 which came into effect from 2-6-98 services of goods transport operators have been exempted from levy of service tax. Therefore, the liability for service tax in respect of goods transport operators is sought to be kept alive by the above amendment for the period 16-11-97 to 1-6-98.

4. Show-cause notices were issued to the appellant on different dates in 2002 demanding service tax from them for the services received from goods transport operators. Show-cause notice proposed to invoke extended period of limitation and there was also a proposal for imposition of penalty and demand of interest. It is the case of the appellants that no show-cause notice could have been issued to them under section 73 even after the amendment brought under Finance Act, 2000.

5. As on the date of issue of the show-cause notice section 73 of the Finance Act stood as follows:

"73. If -

(a)the Assistant Commissioner of Central Excise or, as the case may be, the Deputy Commissioner of Central Excise has reason to believe that by reason of omission or failure on the part of the assessee to make a return under section 70 for any prescribed period or to disclose wholly or truly all material facts required for verification of the assessment under section 71,