By Puloma Dalal, Jayesh Gogri, Chartered Accountants
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Only a Division Bench can decide the matter involving determination of liability?
Facts:
Appellant preferred an appeal along with stay application against an order of Respondent levying service tax on activity of maintenance of software for the period 09-07-2004 to 30-07-2005. A Single Member Bench decided exparte on non-appearance and directed the Appellant to deposit the entire demand along with penalty within 8 weeks. The Appellant filed a Miscellaneous Application to recall the order of the Single Member indicating that the jurisdiction of the division Bench was exercisable in the present case. On merits, the Appellant contended that the said activity was exempt vide Notification No. 20/2003-ST dated 21-08-2003 and since Explanation to section 65(zzg) [which levied service tax on software maintenance] was introduced from 01-06-2007 onwards, service tax was not applicable prior to the said date.
Held:
The Hon. Tribunal (division Bench) held that, since the Central Excise Act required the appeal involving a question of determination of liability to be heard by the division Bench, the order of Single Member Bench was recalled. On Merits, it was observed that at relevant time the said activity was exempt vide Notification No. 20/2003 and further an Explanation to section 65(zzg) was effective only from 01-06-2007. Accordingly, the stay application and appeal were allowed.
