2016 (11) TMI 487 - AT - Service Tax

Eligibility of 75% abatement on taxable value - the claim of appellant is that the appellant has not actually rendered such service as a consignor, he has not availed the credit of duty paid on inputs or capital goods for providing such taxable services but the appellant merely paid the tax which in the normal course should have been paid by the transport agency - suppression of facts - time bar - Held that - I am of the considered opinion that there was no infirmity in the impugned order as the learned Commissioner (A) has allowed 75% abatement on the taxable value for the purpose of payment of service tax. I also find that extended period has rightly been invoked because from 1.1.2005 there was no confusion as to who is liable to pay service tax in case of goods transport agency. Therefore I uphold the impugned order and dismiss the appeal of the appellant.

Summary

Issues: Liability for service tax on transport of goods, abatement on taxable value, imposition of penalty, time limitation for demand, suppression of facts.

Liability for service tax on transport of goods:
The appellant, a partnership firm engaged in manufacturing, availed transport services from 2005 to 2009. The Department found the appellant had not paid service tax on the transportation services. The appellant argued they were not liable as they did not avail credit for providing taxable services. However, the authorities confirmed the demand for service tax, interest, and penalties. The Commissioner (A) partially allowed the appellant's contention, leading to the present appeal.

Abatement on taxable value:
The Commissioner (A) allowed a 75% abatement on the taxable value for service tax payment. The appellant contended that no penalty should be imposed as they paid the service tax before the show-cause notice was issued with the abatement. The AR supported the impugned order, stating the appellant was liable to pay service tax as per Notification No.34/2004.

Imposition of penalty:
The appellant argued that the demand was time-barred and there was no suppression of facts as the Department audited the factory in 2009. They believed the service tax was to be paid by the transport agency. The AR supported invoking the extended period for demand, stating there was no confusion regarding the liability for service tax from 2005.

Time limitation for demand and suppression of facts:
The appellant claimed the entire demand was beyond the limitation period and that there was no suppression of facts, as all records were produced during the audit. The AR argued that the confusion regarding liability for service tax was not acceptable, as the liability and payment were clear from 2005.

The Tribunal upheld the impugned order, stating that the abatement on taxable value was correct, and the extended period for demand was rightly invoked due to clarity on the liability for service tax since 2005. The appeal was dismissed, affirming the liability of the appellant for service tax on transport services.