2010 (9) TMI 297 - HC - Service Tax

Demand of service tax short paid by the respondent assessee - also imposing penalty and ineterst - Held that - exemption is provided by way of notification and the Board can prescribe the procedure for availing the benefit of the said exemption notification - Commissioner (Appeals) further observed that it is nowhere found in the impugned order nor even it had been alleged or held by the adjudicating authority that the GTA in this case has availed credit on inputs and capital goods used for providing taxable service or has availed benefit of Notification No. 12/2003-S.T - order denying the benefit of Notification No. 32/2004-S.T. dated 3-12-2004 is not correct in law - appeal is dismissed

Summary

Issues:
Whether the Tribunal was justified in allowing abatement to the assessee despite the mandatory declaration requirement on the consignment note as per Circular No. B1/6/2005-TRU.

Analysis:

Issue 1: Tribunal's Decision on Abatement

The Commissioner of Central Excise, Customs & Service Tax filed a tax appeal regarding the abatement allowed to the assessee by the Tribunal. The Assistant Commissioner had issued a show cause notice demanding service tax and imposing penalties, which was later challenged before the Commissioner (Appeals) and subsequently before the Tribunal. The Tribunal upheld the Commissioner (Appeals)'s decision, confirming the abatement for the assessee. The revenue contended that the procedure prescribed in Circular No. B1/6/2005-TRU mandated a declaration by the service provider on the consignment note for availing the benefit of exemption notifications. However, the Tribunal held that a declaration by the goods transport agency on the consignment note was sufficient for availing the abatement. The High Court examined the arguments presented and upheld the Tribunal's decision, citing the Circular and relevant legal provisions.

Issue 2: Commissioner (Appeals) and Tribunal's Findings

The Commissioner (Appeals) analyzed the case in detail and noted that the exemption was provided through a notification, allowing the Board to prescribe the procedure for availing the exemption's benefits. It was observed that there was no evidence or allegation that the goods transport agency had availed credit on inputs or capital goods or benefited from a specific notification. Therefore, the Commissioner (Appeals) concluded that denying the benefit of the notification to the assessee was incorrect and dismissed the appeal. The Tribunal, referring to a previous apex court judgment, upheld the Commissioner (Appeals)'s decision, dismissing the revenue's appeal. The High Court concurred with the findings of the lower authorities, emphasizing that the decision was in line with the Departmental Circular and supported by the apex court's ruling.

Conclusion

The High Court found no fault in the orders passed by the lower authorities, as the decision was based on the Departmental Circular and supported by legal precedent. It was determined that no substantial question of law arose from the Tribunal's order, leading to the dismissal of the appeal. The judgment highlighted the importance of adherence to prescribed procedures and legal provisions in tax matters, ultimately upholding the Tribunal's decision to allow abatement to the assessee based on the available evidence and relevant notifications.