2007 (6) TMI 32 - AT - Service Tax

Valuation (Service tax) Appellant contended that they liable for abatement under Notification Nos. 32/2004-ST and 1/2006-ST Held that appellant contention was correct and allowed the appeal

Summary

Issues: Denial of abatement under Notification No. 32/2004-S.T. to recipients of Goods Transport Agency (GTA) services; Interpretation of Board's clarification on the availability of abatement to recipients of GTA services.

In this case, the Appellate Tribunal CESTAT, CHENNAI, examined the denial of abatement under Notification No. 32/2004-S.T. to the appellants, who were recipients of Goods Transport Agency (GTA) services. The ld. Commissioner had demanded service tax on the full 'gross value' of the services, stating that recipients of GTA services were not entitled to abatement. However, the Tribunal found that a Section 37B order issued by the CBEC clarified that recipients of GTA services were indeed entitled to the benefit of abatement under Notifications 32/2004-ST. and 1/2006-S.T., subject to fulfilling prescribed conditions. The Board's clarification emphasized that any person liable to pay service tax on such services could avail of the exemption specified in the notifications. The Tribunal held that the view taken by the ld. Commissioner was contrary to the Board's order, and thus, the appellants were entitled to abatement to the extent of 75% of the value of the taxable service as per the Board's clarification. Consequently, the differential demand of tax and penalty on the appellants was vacated, and the appeal was allowed. The judgment highlights the importance of adhering to the clarifications and orders issued by the competent authorities in matters of taxation to ensure the correct application of exemptions and abatements to eligible recipients of taxable services.