2017 (8) TMI 314 - AT - Service Tax

Abatement - GTA Services - abatement from the gross freight paid - Held that - the entire resolution of the dispute will hinge on the documents that the appellant should have produced to prove their case but which, as per the impugned order, they did not. In the circumstances, the matter requires to be remanded back to the adjudicating authority for de novo consideration - appeal allowed by way of remand.

Issues:
1. Correct application of abatement under Notification No.35/2004-ST.
2. Failure to pay correct service tax on actual value of freight expenses.
3. Denial of abatement claimed by the appellant.
4. Validity of show cause notice dated 03-01-2008.
5. Admissibility of produced documents during adjudication.
6. Request for remand based on availability of required documents.
7. Discharge of duty liability on GTA service.

Analysis:

1. The appellant was paying service tax on Goods Transport Agency (GTA) services after availing abatement under Notification No.35/2004-ST. However, it was observed that the appellant failed to pay service tax correctly on the actual value of freight expenses, using a lesser value after wrongfully availing abatement. This led to the issuance of a show cause notice proposing the denial of ineligible abatement, demanding differential service tax, interest, and penalties under relevant sections of the Finance Act, 1994.

2. The original authority confirmed the demand of service tax, stating that the condition for availing abatement was not fulfilled, and thus the claimed abatement was not allowable. The Commissioner (Appeals) upheld this decision. The appellant, aggrieved by these orders, approached the forum seeking relief.

3. During the hearing, the appellant's advocate highlighted discrepancies in the documents produced during adjudication. The advocate argued that although the required documents were not submitted earlier, they were available now. Requesting another opportunity to present these documents, the advocate contended that the penalties imposed should not be sustained as the disputed tax liability had been paid before the issuance of the show cause notice.

4. The Appellate Tribunal, after considering both sides, concluded that the resolution of the dispute depended on the documents the appellant should have produced but did not. Therefore, the matter was deemed to require remand to the adjudicating authority for fresh consideration. The appellant would be allowed to present all necessary documents to establish their eligibility for abatement on GTA services, potentially leading to a recalculated tax liability based on 25% of the taxable value.

5. The Tribunal emphasized the need for clarity regarding whether the appellant had discharged any duty liability concerning GTA services. Therefore, all issues were left open for the de novo adjudicating authority to determine the duty liability, interest, and penalties accordingly. The appeal was allowed by way of remand for further proceedings.

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