2018 (2) TMI 726 - AT - Service Tax

GTA Service - abatement at 75% in terms of N/N. 32/2004-ST - reverse charge mechanism - Held that - The Tribunal in number of cases has held that where the GTA was not registered with the Department, there was no question of availment of credit - decision in the case of Lykes Line Ltd. Versus Commissioner of Service Tax, Mumbai-I 2016 (11) TMI 192 - CESTAT MUMBAI referred. The appellant had produced a general certificate of the GTA indicating that no credit was being availed by him - if a certificate to the effect that no credit has been availed by the GTA stands produced in respect of a few number of invoices, the same would reflect upon the same fact that credit was not being availed in respect of balance invoice/consignment notes also. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of abatement on service tax liability for GTA services.
2. Allegation of GTA availing cenvat credit on capital goods.
3. Validity of the certificate produced by the appellant regarding non-availment of credit by GTA.

Analysis:
1. The appellant, engaged in cement manufacturing, availed GTA services and paid service tax after a 75% abatement as per Notification No. 32/2004-ST. However, proceedings were initiated alleging denial of abatement due to the GTA's purported availing of cenvat credit on capital goods, leading to demands, interest, and penalties. The issue revolved around the violation of conditions of the notification.

2. The Tribunal referred to past decisions, including Venkateshwara Distributors (P) Ltd., Indian Oil Corporation Ltd., and Lykes Line Ltd., to establish that where the GTA was unregistered with the Department, the question of credit availment did not arise. This legal precedent supported the appellant's position that the GTA's lack of registration implied no credit utilization, thus upholding the abatement eligibility.

3. The appellant provided a general certificate from the GTA stating non-availment of credit. The Revenue contended that such certification should apply to each consignment note individually. However, the Tribunal disagreed, reasoning that if a certificate confirmed no credit utilization for some invoices, it implied the same for all, thereby dismissing the Revenue's objection and supporting the appellant's stance.

4. Consequently, the Tribunal set aside the previous order, allowing the appeal and granting consequential relief to the appellant. The decision underscored the importance of compliance with notification conditions and the significance of legal precedents in determining tax liabilities, ultimately favoring the appellant based on the evidence presented.

This detailed analysis of the judgment highlights the key issues, legal arguments, precedents, and the final decision rendered by the Appellate Tribunal CESTAT, Allahabad, in favor of the appellant.