2019 (11) TMI 1610 - AT - Service Tax

Benefit of service tax exemption - GTA services during the period 2013-2014 to 2015-2016 - gross receipt is below ₹ 10 lakhs - extended period of limitation - penalty - HELD THAT - After allowing the abatement, the taxable value in each of the year under dispute is less than ₹ 3.5 lakhs. Further, it s found that vide exemption notification (SSI) for service providers, as amended by N/N. 33/2012-ST dated 20.06.2012, the exemption continues to eligible assessees. Further, Clause-3 of the said notification provides that, for determining the aggregate value not exceeding ₹ 10 lakhs, to avail exemption under this notification, in relation to taxable services provided by GTA, the payment received towards the gross amount charged by such GTA under Section 67 of the Finance Act, for which the person liable for paying service tax is specified under Sub-section (2) of Section 68 read with Service Tax Rules, shall not include the value charged in the invoice, which is exempt from the whole of service tax leviable thereon. The appellant is entitled to service tax exemption benefit under the exemption notification, and are not liable to pay service tax for the period under dispute - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Absence of the appellant during the proceedings
2. Taxability of services provided by the appellant as a transporter to a Government Organization
3. Invocation of extended period of limitation for demanding service tax
4. Imposition of penalties under various sections of the Act
5. Appeal before the Commissioner (Appeals) challenging the demand of service tax
6. Interpretation of exemption notification for service providers
7. Applicability of service tax exemption to the appellant

Analysis:

1. The appellant was consistently absent during the proceedings, leading to the disposal of the appeal ex parte. The authorized representative for the Revenue assisted in the proceedings due to the appellant's absence.

2. The appellant was engaged in transporting timber and other forest products for a Government Organization. The Revenue contended that the appellant was providing taxable services of Goods Transport Agency (GTA) during a specific period. The appellant argued that their gross receipts were below the threshold for service tax liability.

3. The Revenue issued a show cause notice invoking the extended period of limitation for demanding service tax, along with interest and penalties under various sections of the Act. The appellant contested the demand, citing their belief that they were not liable to pay service tax.

4. The Adjudicating Authority confirmed the proposed demand and imposed penalties for contravention of sections of the Act, non-filing of returns, and late fees. The penalties were upheld by the Appellate Authority.

5. The Commissioner (Appeals) confirmed the demand, stating that the service tax liability for the period after the introduction of the negative list of services was established. The Commissioner observed that services provided to Government Departments are chargeable unless covered by specific exemptions.

6. The interpretation of the exemption notification for service providers was crucial. The appellant's eligibility for exemption under the notification was analyzed, considering the value of services provided and the specific conditions outlined in the notification.

7. The Tribunal held that the appellant was entitled to the service tax exemption benefit under the exemption notification. Consequently, the appeal was allowed, the impugned order was set aside, and the appellant was granted consequential benefits as per the law.