2008 (8) TMI 255 - AT - Service Tax

Recipient of goods transport agency services - eligibility of exemption Notification Nos. 32/04 and 34/04 - from the work sheet submitted that the same trucks are being used for transporting on more than one occasion and the condition of receipt of gross amount not exceeding Rs. 750/- for individual consignment and Rs. 1500 for consignments may not be fulfilled in this case. The Notification No. 32/2004 relates to collection of service tax on 25% of the value of gross amount paid by them. This notification prima facie, is applicable to the applicant stay granted partly

Summary

Issues:
Service tax liability on goods transport agency services; Applicability of exemption Notification Nos. 32/04 and 34/04.

Analysis:
The judgment by the Appellate Tribunal CESTAT NEW DELHI, delivered by Member (T), addresses the issue of service tax liability on goods transport agency services for the period April 2005 to March 2006. The appellant had paid charges to various transporters and service tax was demanded on them as the recipient of these services. The appellant claimed eligibility for exemption under Notification Nos. 32/04 and 34/04 before the Commissioner (Appeals). Notification No. 34/04 exempts service tax on the gross amount charged for individual consignments not exceeding Rs. 750 and for consignments not exceeding Rs. 1500. However, it was observed that the trucks were used for transporting on multiple occasions, potentially not meeting the conditions of the exemption. On the other hand, Notification No. 32/04 pertains to the collection of service tax on 25% of the value of the gross amount paid, which was found to be prima facie applicable to the appellant.

The Tribunal, after considering all facts and circumstances, directed the appellant to deposit Rs. 75,000 within eight weeks and report compliance by a specified date. Upon this pre-deposit, the judgment granted a waiver on the balance amount of duty, interest, and penalty, with the recovery thereof stayed until the appeal's disposal. This decision aimed at balancing the interests of the appellant and the tax authorities by providing a partial relief to the appellant while ensuring compliance with the tax liability and due process of law.

In conclusion, the judgment provides a nuanced analysis of the service tax liability on goods transport agency services and the applicability of exemption notifications. It underscores the importance of adhering to statutory provisions while also allowing for a reasonable opportunity for the appellant to comply with the tax obligations. The decision reflects a balanced approach in resolving the issues at hand and upholding the principles of tax law and procedural fairness.