2013 (12) TMI 1329 - AT - Service Tax

Waiver of pre-deposit - on the ground that the appellant is not eligible for availing abatement of 75% of the value of the freight charges, as they have not given the declaration on the consignment notes as required by law - It is undisputed in these four cases the question is of eligibility to 75% abatement of the freight charges by the goods transport agency a service provider - Held that even Board Circular No. 37B also indicates that the procedure prescribed in the Board Circular, is that a declaration by the service provider, in all such cases, on the consignment note, to the effect that the conditions of the aforesaid exemption notification have been satisfied, would be sufficient for availing of the benefit under the said notifications - The Tribunal in the case of IOCL Vs. CCE 2011 (7) TMI 741 - CESTAT, KOLKATA has taken a prima facie view that declaration given by the transport operators in a consolidated manner should serve the purpose and declaration on each consignment note need not be insisted upon - Prima facie case in favour of assessee - Stay granted.

Summary

Issues:
1. Liability to pay service tax as a recipient of Goods Transport Agency service.
2. Denial of abatement of 75% of freight charges due to lack of evidence of transporter not availing Cenvat credit.
3. Recovery proceedings initiated for recovery of service tax on entire freight paid.
4. Interpretation of conditions for abatement under notification 32/2004 ST and 1/2006-ST.
5. Submission of declarations from transporters regarding non-registration with service tax department and non-availment of Cenvat credit.
6. Requirement of pre-deposit of balance dues arising from the impugned order.

Analysis:
1. The appellant was held liable to pay service tax as a recipient of Goods Transport Agency service. A demand of Rs.1,33,929/- was confirmed against the appellant for the period Jan'05 to Jan'09, as the abatement of 75% of freight charges was denied due to the lack of evidence that the transporter did not avail the benefit of Cenvat credit on inputs and capital goods used for providing transportation service.

2. The appellant argued that the notification did not specify that the declaration had to be present in each consignment note. The appellant contended that certificates issued by transport operators should suffice, and they had produced such certificates in some cases. The appellant highlighted that the condition for abatement should be construed liberally, especially when the transporters were individuals and not Goods Transport Agencies. Declarations were submitted to show that the transporters were not registered with the service tax department and had not availed Cenvat credit.

3. The Assistant Commissioner argued that despite a previous case in 2002, the appellant failed to produce any declaration. The declarations submitted before the Commissioner (Appeals) were deemed insufficient as they lacked crucial details and could not be linked to the consignments involved.

4. The Tribunal considered the arguments from both sides and noted that the appellant had submitted declarations from different transporters, asserting that none of them were registered with the service tax department to avail Cenvat credit. Citing a previous case, the Tribunal opined that a consolidated declaration by transport operators could serve the purpose, and it may not be necessary to insist on a declaration on each consignment note.

5. The Tribunal decided to consider this aspect further in the final hearing. The appellant had already paid a portion of the demanded amount, which was deemed sufficient for the admission of the appeal. Therefore, the requirement of pre-deposit of the balance dues arising from the impugned order was waived, and the collection of the remaining amount was stayed during the appeal's pendency.