2008 (3) TMI 241 - AT - Service Tax

Applicant paying tax on GTA service as deemed service provider - SCN was issued to deny the abatement of 25% as the concession was available only to the goods transport agency and not to the recipient commissioner directed appellant to pay tax without availing abatement holding the person paying tax is not relevant - decision of the Commissioner is, prima facie, contrary to the clear proposal in the SCN - waiver and stay of recovery of dues given

Summary

Issues:
1. Interpretation of Notification No. 4/2004-ST regarding service tax liability for recipients of services from a Goods Transport Agency.
2. Eligibility of recipients of services for benefit under Notification No. 34/2004.
3. Applicability of Notification No. 32/2004 for payment of service tax.

Analysis:
1. The case involved a dispute regarding the applicability of Notification No. 4/2004-ST concerning service tax liability for recipients of services from a Goods Transport Agency. The original authority denied the benefit of the notification to the recipient, proposing duty payment on 25% of the gross value of service charges. The Commissioner (Appeals) later acknowledged that recipients could avail of the benefit under Notification No. 34/2004, emphasizing that the exemption was related to services, not the entity paying the tax.

2. The issue of eligibility for the benefit under Notification No. 34/2004 was crucial in this case. The Commissioner (Appeals) recognized the appellant's claim that recipients of services could also avail of the exemption under the notification. However, a condition was imposed that the duty should be paid without utilizing the benefit of Notification No. 32/2004, which allowed service tax payment on only 25% of the gross value of services.

3. The Tribunal observed that the decision of the Commissioner (Appeals) appeared to deviate from the original show cause notice's proposal, introducing new grounds for the case. Such a deviation was deemed impermissible. Consequently, the Tribunal held that the appellant had a strong case for waiver and stay of recovery of dues as per the impugned order, ordering accordingly. The judgment highlighted the importance of adhering to the grounds raised in the show cause notice and maintaining consistency in decision-making processes.