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Issues:
Waiver of pre-deposit of service tax on 'Goods Transport Agency Service' availed by M/s. KMB Granites (P) Ltd. during 1/2005 to 6/2005. Analysis: The appellant, M/s. KMB Granites (P) Ltd., sought a waiver of pre-deposit of service tax amounting to Rs. 44,663 on 'Goods Transport Agency Service' (GTA service) utilized by them between January 2005 to June 2005. The contention put forth by the appellants was that the demand was raised erroneously under GTA service for the freight incurred in transporting their materials by trucks. They argued that the truck operators they engaged did not meet the definition of a 'goods transport agency' as per sub-section (50)(b) of Section 65 of the Finance Act, 1994, which specifies a 'commercial concern' providing services related to the transport of goods by road and issuing consignment notes. The appellants emphasized that the truck operators did not qualify as a 'commercial concern' as required for levy under GTA. They cited a precedent where a penalty imposed for failing to file service tax returns by an individual classified as a provider of service under 'manpower recruitment or supply agency services' was vacated because the definition during the relevant period did not cover such services by an individual, but only by a commercial concern. The definition was later amended to include 'any person' instead of 'commercial concern.' The appellant's counsel further highlighted that the Finance Minister, during the imposition of the levy on GTA service, clarified that the intention was not to levy service tax on truck owners or operators. This clarification was supported by an extract from the Finance Minister's Budget speech in 2004. After considering the arguments presented, the Judge found that the appellants had established a prima facie case against the demand for service tax. Consequently, it was ordered that there would be a waiver of pre-deposit and a stay on the recovery of the disputed service tax amount pending the final decision on the appeal. In conclusion, the judgment ruled in favor of M/s. KMB Granites (P) Ltd., granting them a waiver of pre-deposit and staying the recovery of the service tax amount in question related to the GTA service utilized by them between January 2005 to June 2005. The decision was based on the appellant's contentions regarding the misapplication of the tax under GTA service, supported by legal interpretations and precedents, as well as the clarification provided by the Finance Minister regarding the non-applicability of service tax on truck owners or operators.
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