2008 (9) TMI 278 - AT - Service Tax

GTA service - Allegation that applicant paid Service Tax on the gross amount of freight on some consignments while on other consignments, applicant availed abatement u/not. 32/2004 and paid Service Tax only on 25% of gross amount - Revenue s contention is that a single assessee cannot adopt two policies and exemption benefit is not available - since there is no allegation of violation of conditions of notification by the Applicant and there no any such restriction in the Notification as contended by the Revenue, stay application is allowed

Summary

Issues:
- Application for waiver of pre-deposit of tax and penalty based on alleged violation of exemption Notification No. 32/2004-ST.
- Interpretation of conditions under the exemption notification.
- Determination of whether the Applicant qualifies for waiver of pre-deposit based on the alleged violation.

Analysis:
The judgment by the Appellate Tribunal CESTAT, New Delhi involved an application for waiver of pre-deposit of tax and penalty amounting to Rs. 6,63,967/- each. The Applicant had paid Service Tax on the gross amount of freight in some consignments and 25% of the gross amount of freight in other consignments based on exemption Notification No. 32/2004-ST. The Revenue contended that adopting two different policies by a single assessee was impermissible under the notification, thereby denying the exemption benefit.

The Tribunal examined the relevant portion of exemption Notification No. 32/2004-S.T., which stated specific conditions for the application of the exemption. These conditions included restrictions related to the availing of Cenvat credit of duty on inputs or capital goods, as well as the benefit under a specific government notification. The Tribunal noted that there was no allegation of violation of these conditions by the Applicant. Consequently, the Tribunal held that prima facie, there was no restriction in the notification as contended by the Revenue. Therefore, the Applicant established a prima facie case for the waiver of the pre-deposit of the entire amount of duty and penalty.

Ultimately, the Tribunal granted the Applicant's request for waiver of pre-deposit of tax and penalty until the disposal of the appeal, as they found no violation of the conditions stipulated in the exemption notification. The stay application was allowed, and the order was dictated and pronounced in open court on 12-9-2008 by Member (J) P.K. Das.