2014 (10) TMI 732 - AT - Service Tax

Abatement under Notification No. 32/2004 - GTA service - CENVAT Credit - Held that - where the service provider has not taken registration, there is no need for the service receiver to show evidence that the service provider has not taken any credit and benefit of abatement under Notification No. 32/2004 would be available. As regards the second ground which is resulted in demand for service tax, the learned CA submits that once the service tax has been paid by the supplier of GTA services, the question of demand by the appellant does not arise. The demand has been confirmed only on the ground that according to the notification the service receiver is liable to pay. In our opinion, for the same services, there cannot be calculation of tax otherwise. In the absence of any evidence that the service provider had not paid the tax, the demand for service tax on the sole ground that receiver is liable to pay cannot be sustained. - stay granted.

Summary

Issues involved: Common issue in 3 appeals regarding service tax demand and eligibility of abatement under Notification No. 32/2004.

Analysis:

1. Orma Granite Centre Case: The demand for service tax amounts to Rs. 1,73,005 after considering allowed abatements. The issue of eligibility of abatement under Notification No. 32/2004 was discussed. The AR argued that the Commissioner (Appeals) decision on abatement eligibility does not need interference. The AR highlighted that the appellants failed to provide proof regarding GTA services provided by non-registration certificate holders and service providers not availing CENVAT credit. The CA contended that as the remaining persons or new truck owners were not registered, evidence of non-availment of CENVAT credit was unnecessary. Citing a Tribunal decision, the CA argued that if the service provider is unregistered, the service receiver need not prove non-credit availment for abatement eligibility. Additionally, the CA argued against the demand for service tax, stating that if the supplier has paid service tax, the receiver should not be held liable. The Tribunal agreed, emphasizing that without evidence of the service provider not paying tax, demanding tax solely on the basis of receiver liability is unsustainable.

2. M/s. Orma Marble World Case: In this case, the service tax demand was based on the receiver's liability even if the service provider had paid. The Tribunal reiterated that without evidence of the service provider not paying tax, the receiver cannot be compelled to pay. Consequently, the appeal in this case was also allowed.

3. Prima Facie Case and Pre-Deposit Waiver: The Tribunal found that in all three cases, the appellants established a prima facie case in their favor for a complete waiver of pre-deposit. Consequently, the requirement of pre-deposit was waived, and a stay against recovery was granted for 180 days from the date of the order.

This judgment highlights the importance of providing evidence regarding service tax payments by service providers and the implications of receiver liability. It also demonstrates the Tribunal's consideration of a prima facie case for pre-deposit waiver in appeals related to service tax demands and abatement eligibility.