2008 (12) TMI 661 - AT - Service Tax

Summary

Issues:
1. Applicability of Notification No. 32/2004-ST regarding service tax liability on services provided by Goods Transport Agency.
2. Conditions for availing benefit under Notification No. 32/2004-ST.
3. Requirement of evidence for fulfilling conditions under the notification.
4. Pre-deposit of service tax amount and interest under Section 75.

Analysis:
The judgment by the Appellate Tribunal CESTAT Bangalore dealt with the issue of the appellants, who were manufacturers of paper, availing the services of a Goods Transport Agency and the subsequent demand of service tax by the Revenue. The appellants were required to pre-deposit a substantial sum of service tax along with interest under Section 75, as per the impugned order. The main contention revolved around the applicability of Notification No. 32/2004-ST, which stipulated that service tax liability was to be discharged only on 25% of the gross amount paid to the GTA. The Revenue contended that the appellants did not fulfill the conditions of the notification, leading to the demand for differential service tax amounts.

The learned Advocate representing the appellants referred to a CBEC order issued under Section 37B, which clarified that the exemption notification was available to any person made liable to pay service tax while discharging the service tax liability. This clarification supported the appellants' entitlement to the benefits of Notification No. 32/2004. On the other hand, the Departmental Representative argued that the appellants had not met the conditions related to not availing credit of duty paid on inputs or capital goods and not benefiting from Notification No. 12/2003. The DR emphasized the need for the appellants to provide evidence of fulfilling these conditions, which they allegedly failed to do, resulting in the denial of the notification's benefits.

During the hearing, the appellants' Advocate presented declarations from the Goods Transport Agency confirming the non-availment of any credit, strengthening the appellants' case on merits. Despite the absence of an endorsement in the consignment note, the Tribunal found the appellants to have a strong prima facie case. Consequently, the Tribunal ordered a complete waiver of the pre-deposit of the demanded dues until the appeal's disposal, prohibiting Revenue from taking coercive measures during this period. The matter was scheduled for further hearing on a specified date to address any pending issues comprehensively.