2015 (10) TMI 118 - AT - Service Tax

GTA service - condition regarding declaration to be made by the transport agency regarding non availment of cenvat credit - Abatement under Notification no.32/2004-ST dated 3.12.2004 - Held that - Credit on inputs and capital goods is not taken by transport agency nor the benefit of Notification No.12/2003-ST availed by it. The notification nowhere prescribes that declaration to that effect has to be made on the consignment notes for the purpose of claiming the benefit of Notification No.32/2004-ST. Even so the appellant was able to provide such declarations from the major transporters at the time of filing reply to the show cause notice. It is settled law that CBEC circular cannot add conditionalities to an exemption notification. By producing certificates from the major transporters, the appellant substantially established that the conditions of Notification No.32/2004-ST were met. On the other hand, there is not even an iota of evidence in the SCN that the condition of Notification No.32/2004-ST were not satisfied. In a fairly similar case of Venkateshwara Distributors Pvt.Ltd. vs. CCE, Delhi-I- 2013 (12) TMI 730 - CESTAT NEW DELHI , CESTAT allowed the benefit of the said notification. In view of foregoing circumstances, we find that the demand is not sustainable - Decided in favour of assessee.

Summary

Issues: Service tax demand based on abatement under Notification no.32/2004-ST and requirement of declaration by transport agency regarding non-availment of benefit under Notification No.12/2003-ST.

In this case, the appellant filed an appeal against the Order-in-Appeal upholding a service tax demand of &8377; 5,20,435/- for the period April 2005 to March 2006. The demand was based on the appellant's alleged inadmissible abatement claim under Notification no.32/2004-ST due to the absence of a declaration on the consignment note by the transport agency regarding non-availment of the benefit of Notification No.12/2003-ST. The appellant argued that Notification No.32/2004-ST did not mandate such a declaration requirement. The appellant also provided declarations from major transporters confirming non-availment of benefits under Notification No.12/2003-ST.

The learned AR cited Board circulars emphasizing the requirement for consignment notes to carry declarations by the transport agency stating that no credit on inputs or capital goods was taken and that the benefit of Notification No.12/2003-ST was not availed. The AR argued that this condition was not met, justifying the demand. However, upon reviewing Notification No.32/2004-ST, the Tribunal found that it did not specify the need for declarations on consignment notes. The appellant's submission of declarations from major transporters during the show cause notice stage was deemed sufficient to establish compliance with the notification's conditions.

The Tribunal highlighted that CBEC circulars cannot impose additional conditions beyond those specified in an exemption notification. Citing a precedent where a similar issue was decided in favor of the taxpayer, the Tribunal concluded that the demand was unsustainable. As there was no evidence in the show cause notice indicating non-compliance with the conditions of Notification No.32/2004-ST, the Tribunal allowed the appeal, setting aside the impugned order and ruling in favor of the appellant.