2008 (5) TMI 97 - AT - Service Tax

Recipient of goods transport agency service - benefit of abatement as per Notification No. 32/2004-S.T., dated 3-12-2004 proof of actual transportation Whether actual transportation took place by the concerned vehicles has to be proved by the respondent and the same has to be verified not by taking the words of the transporters but by cross-checking from other reliable sources and agencies - set aside the order of the Commissioner (A) and remand the matter to the Asst. Commissioner

Summary

Issues:
Appeal against order of Commissioner of Central Excise (Appeals) setting aside order-in-original of Assistant Commissioner and allowing appeal of respondent regarding availment of abatement on gross amount charged from customer in relation to transport of goods by road.

Analysis:
The appeal before the Appellate Tribunal CESTAT NEW DELHI involved a dispute regarding the availment of abatement on the gross amount charged by a goods transport agency to a customer for providing taxable service in relation to the transport of goods by road. The appeal was against the order of the Commissioner of Central Excise (Appeals) which set aside the order-in-original of the Assistant Commissioner and allowed the appeal of the respondent. The issue revolved around the interpretation and application of Notification No. 32/2004-S.T., dated 3-12-2004, which provided an exemption on service tax levied on a value equivalent to twenty-five percent of the gross amount charged from the customer by the goods transport agency.

The Board (CBEC) issued a circular to operationalize various notifications, including the aforementioned Notification dated 3-12-2004. The circular stated that a declaration by the goods transport agency in the consignment note, confirming non-availment of credit on inputs or capital goods for the service provision, suffices for abatement availment. In this case, the respondent submitted photocopies of such declarations by transporters on their letterheads to claim the benefit of abatement. However, discrepancies were found in the declarations submitted by the respondent, leading to the Assistant Commissioner's decision to confirm a demand for service tax with interest and impose a penalty under Section 76 of the Finance Act.

On appeal, the Commissioner (Appeals) acknowledged that abatement could be allowed if no cenvat credit had been availed of. The Commissioner also noted that the respondent's claim of non-availment of cenvat credit should not be rejected solely based on photocopies of declarations until proven otherwise. The Commissioner emphasized the need for verification of documents before drawing any adverse conclusions. Despite this, the Commissioner set aside the order without further directions for verification, prompting the Appellate Tribunal to intervene.

The Appellate Tribunal, after hearing the parties, concluded that verification of the documents and certificates submitted by the respondent was essential not only from the transporters but also from other reliable sources. The Tribunal criticized the lack of proper verification and the premature conclusion reached by the Commissioner (Appeals). Emphasizing the burden of proof on the assessee for claiming abatement, the Tribunal highlighted the necessity of verifying claims through reliable sources rather than accepting them at face value. Consequently, the Tribunal set aside the Commissioner (Appeals) order and remanded the matter back to the Assistant Commissioner for fresh orders in accordance with the law.

In conclusion, the Appellate Tribunal allowed the appeal by way of remand, emphasizing the importance of thorough verification and proper assessment in matters concerning the availment of abatement on service tax for goods transport agencies. The Tribunal clarified that its decision should not be construed as a final opinion on the merits of the case, leaving room for further examination and adjudication.