2010 (12) TMI 786 - AT - Service Tax

Waiver of pre-deposit - Notification No. 12/2003-S.T., dated 20-6-2003 - The restriction as to admissibility of abatement with reference to non-availment of CENVAT credit applies to the service provider- M/s. IOCL is a recipient of the GTA service and discharged the service tax in terms of Section 68(2) of the Finance Act, 1994 - The assessee is entitled to the abatement denied to it as per the impugned order as per the decision in the case of Commissioner of Central Excise, Rajkot v. Sunhill Ceramics Pvt. Ltd. - (2007 -TMI - 3487 - CESTAT, AHMEDABAD) - Decided against the assessee.

Summary

Issues:
1. Waiver of pre-deposit and stay of recovery of an irregular amount.
2. Availment of CENVAT credit during a specific period.
3. Applicability of exemption under Notification No. 1/2006-S.T. and Notification No. 12/2003-S.T.
4. Interpretation of conditions for availing abatement in the GTA service category.
5. Admissibility of abatement to a service provider who is a recipient of the GTA service.

Analysis:
1. The appellants sought waiver of pre-deposit and stay of recovery of an amount found irregular due to the availing of CENVAT credit during a specific period. The demand was raised based on the appellants' alleged inadmissible exemption under Notification No. 1/2006-S.T. and Notification No. 12/2003-S.T. The demand included applicable interest and penalty under Section 11AC of the Act read with Rule 15 of the Cenvat Credit Rules.

2. The learned Advocate for the appellants argued that the Notification No. 1/06-S.T. and 12/03-S.T. required the service provider not to avail CENVAT credit on capital goods, inputs, and input services. It was contended that M/s. IOCL, as a recipient of the GTA service, was not subject to the restrictions laid down in the notifications. The Tribunal's decision in a similar case supported this argument, emphasizing that the condition of not taking credit of duty paid on inputs or capital goods should relate to the services actually rendered by the Transport Agency.

3. After considering the submissions, the judge found merit in the appellants' plea. It was determined that the restriction on the admissibility of abatement with reference to non-availment of CENVAT credit applied to the service provider, not to M/s. IOCL as a recipient of the GTA service. The judge relied on the decision in a previous case to support this interpretation and concluded that the appellants were entitled to the abatement denied to them in the impugned order.

4. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief. The judge pronounced the decision in court, providing relief to the appellants based on the interpretation of the conditions for availing abatement in the GTA service category and the applicability of exemptions under the relevant notifications.