2016 (6) TMI 1104 - AT - Service Tax

GTA service - claim of exemption where gross amount charged on an individual consignment transported in a goods carriage does not exceed ₹ 750/- or ₹ 1500/- extended period of limitation - appellant have taken categorical stand that they have bonafide belief that exemption of Notification No. 34/2004 is applicable to them in respect of transport of goods if freight per truck load does not exceed ₹ 1500/-. Despite this correspondence the department has issue the show-cause notice on 28th January, 2009 for the period 2006-07, hence the extended period was invoked. Held that - The appellant took clear stand that as per their belief they are entitled for the exemption for the reason that only in case of transportation charge exceed ₹ 1500/-, it is chargeable to Service Tax but in the case of appellant, the freight charges ranging from ₹ 750/- to ₹ 1500/-. Moreover, the issue was not free from doubt and the same was finally decided in the case of Bellary Iron & Ores Pvt. Ltd. 2009 (12) TMI 150 - CESTAT, BANGALORE . In these circumstances, we do not find any suppression of fact on the part of the appellant, hence the demand of longer period by invoking proviso to Section 73(1) is not sustainable. Demand set aside - Decided in favor of assessee.

Summary

Issues Involved:
Interpretation of Notification No. 34/2004-ST regarding Service Tax exemption for goods transport agents based on consignment value. Application of extended period for demand and imposition of penalty.

Analysis:

Issue 1: Interpretation of Notification No. 34/2004-ST
The case involves a dispute over the interpretation of Notification No. 34/2004-ST, which provides an exemption from Service Tax for goods transport agents based on consignment value. The notification exempts service tax if the gross amount charged on an individual consignment transported in a goods carriage does not exceed ?750. The appellant, a Goods Transport Agent, transported a single consignment and charged freight ranging from ?751 to ?1500. The Commissioner (Appeals) upheld the order-in-original, stating that the exemption is applicable only if the freight charge on an individual consignment is less than ?750. The Tribunal referred to the decision in the case of Bellary Iron & Ores Pvt. Ltd., which clarified that the exemption applies when the freight charge is not more than ?750 for an individual consignment. The Tribunal concluded that the appellant was not entitled to the exemption under Notification No. 34/2004-ST due to the consignment's freight charges exceeding ?750.

Issue 2: Application of Extended Period for Demand
The appellant argued against the application of the extended period for demand, contending that there was no suppression of facts on their part. The appellant highlighted a chain of correspondence with the authorities regarding the eligibility of the notification. The appellant maintained a bona fide belief that they were entitled to the exemption based on the consignment's freight charges. The Tribunal acknowledged the correspondence and the appellant's stance, noting that the issue was not free from doubt. As there was no suppression of facts, the Tribunal held that the demand for the extended period was not sustainable. Consequently, the Tribunal upheld the demand for the normal period of one year prior to the show-cause notice and dropped the demand for the extended period.

Conclusion:
The Tribunal partially allowed the appeals by upholding the demand of Service Tax for the normal period, dropping the demand for the extended period, and waiving the penalty. The decision was based on the interpretation of Notification No. 34/2004-ST and the absence of suppression of facts by the appellant, leading to the conclusion that the extended period demand and penalty were not justified.