2019 (4) TMI 1816 - AT - Service Tax

Abatement claim - benefit of N/N. 32/04-ST dated 03.12.2004 - Goods Transport Agency Service - reverse charge mechanism - period Jan.' 2005 to Sep.' 2007 - HELD THAT - It is an admitted fact on record that the appellant got itself registered with the service tax department as a recipient of GTA service. The transporters engaged by the appellant were mere goods transport operator/owner of truck and were not registered with the service tax department. Since the transport operators were not goods transport agents, there was not requirement of issuance of any consignment note, as mandated in the service tax statute. Further, since those operators were not registered with the service tax department, there was no question of availment of cenvat benefit in respect of duty/tax paid on the inputs or taxable services. Thus, the conditions of Notification dated 03.12.2004 have been duly complied with by the appellant for the purpose of exemption benefit by way of abatement for payment of service tax. There are no merits in the impugned order passed by the Ld. Commissioner (Appeals) - appeal allowed - decided in favor of appellant.

Issues:
1. Interpretation of Notification No. 32/04-ST regarding abatement of service tax.
2. Compliance with conditions of the notification by the appellant.
3. Requirement of consignment note and registration with the service tax department for availing abatement.
4. Applicability of Cenvat Credit Rules and Notification 12/2003 for exemption.
5. Liability of the appellant to pay service tax as a recipient of GTA service.

Detailed Analysis:
1. The judgment involves the interpretation of Notification No. 32/04-ST regarding the abatement of service tax. The appellant claimed abatement of 75% from payment of service tax based on this notification during the disputed period. The key issue was whether the appellant fulfilled the conditions specified in the notification to avail the benefit of the abatement.

2. The compliance with the conditions of the notification by the appellant was crucial in this case. The appellant argued that the transporters engaged were not goods transport agents but mere transport operators, and hence, the requirement of a consignment note did not apply. The appellant contended that since the transport operators were not registered with the service tax department, they did not avail Cenvat credit on inputs or capital goods, thereby meeting the conditions of the notification.

3. The judgment addressed the requirement of a consignment note and registration with the service tax department for availing the abatement. It was established that the transport operators engaged by the appellant were not goods transport agents and were not registered with the service tax department. Therefore, the obligation to issue a consignment note did not arise, and the conditions of the notification were deemed to be complied with by the appellant for the purpose of exemption benefit by way of abatement for service tax payment.

4. The applicability of Cenvat Credit Rules and Notification 12/2003 for exemption was also discussed. The judgment highlighted that the exemption under the notification did not apply if the service provider had availed input and capital goods credit for providing GTA service. Since the individual truck operators were not registered with the service tax department, the question of availing input credit or capital goods credit did not arise, supporting the appellant's eligibility for the abatement.

5. Lastly, the liability of the appellant to pay service tax as a recipient of GTA service was clarified. The judgment emphasized that the appellant was liable to pay service tax as a recipient, and the appellant correctly paid 25% service tax on the freight paid. Ultimately, the tribunal allowed the appeal in favor of the appellant, setting aside the impugned order passed by the Commissioner (Appeals) based on the detailed analysis and interpretation of the relevant legal provisions and notifications.

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