2012 (9) TMI 451 - AT - Service Tax

GTA services - Declaration on consignment note - denial on the ground that the declarations required to be made on the consignment note were not made by the service providers Held that - In the absence of specific condition in the notification, substantive benefit cannot be denied by issue of a circular prescribing additional conditions

Summary

Issues: Abatement of service tax based on declarations on consignment note.

Analysis:
The judgment revolves around the abatement of 75% from the value of the service provided for determining the service tax payable by the receiver of the service. The denial of abatement was based on the absence of declarations on the consignment note by the service providers regarding the non-availment of input/capital goods credit and the benefit of Notification No. 12/2003. The appellant argued that the decision was influenced by a circular issued by the Board in 2005, requiring service providers to make such declarations on the consignment note. However, the appellant cited a decision of the Hon'ble High Court of Gujarat in a similar case, emphasizing that the circular cannot impose additional conditions not specified in the relevant notification. The High Court's ruling supported the view that substantive benefits cannot be denied based on circulars introducing new requirements. Consequently, the Tribunal allowed the appeal, granting relief to the appellant based on the precedent set by the High Court's decision.

In essence, the key issue addressed in this judgment is the validity of denying abatement of service tax due to the absence of specific declarations on the consignment note as mandated by a circular, despite the lack of such requirements in the relevant notification. The Tribunal's decision, guided by the precedent set by the High Court of Gujarat, emphasizes that circulars cannot impose additional conditions beyond what is specified in the notification. This underscores the importance of aligning administrative directives with the legal framework established by notifications, ensuring that substantive benefits are not arbitrarily denied based on extraneous requirements introduced through circulars. The judgment serves as a reminder of the necessity to adhere to the statutory provisions and not allow administrative guidelines to override or contradict the clear mandates outlined in official notifications.