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2018 (2) TMI 1025 - AT - Service TaxValuation - GTA service - abatement - N/N. 32/2004-ST, dated 03.12.2004 - Department took the view that there is no evidence that credit of duty paid on inputs or capital goods, has not been taken by the Goods Transport Agency under N/N. 12/2003-ST, dated 20.06.2003 - Held that - from circular No. 137/154/2008-CD.4, dated 21.08.2008, it is but evident that even for the past cases before the extension of benefit of 75%, abatement to GTA services unconditionally (by notification No. 13/2008, dated 1.3.2008), the benefit of such abatement will be available to the appellant without requirement of any specific endorsement on every consignment note, but merely on general declaration from GTA. In the instant case, from the facts it is seen that the appellants have obtained such undertaking letters from concerned transporters. This being so, the confirmation of demand is in contradiction to the clarifications of CBEC themselves vide circular dated 21.08.2008 - demand set aside. Appeal allowed - decided in favor of appellant.
Issues:
Service tax liability on freight charges under notification No. 32/2004-ST, dated 03.12.2004. Analysis: The case involved M/s R.A.K. Ceramics Pvt. Ltd., manufacturers of ceramic tiles, discharging service tax liability on 25% of freight charges under notification No. 32/2004-ST. The Department alleged non-compliance with conditions regarding credit of duty on inputs, declaration requirements, and penalties. The original authority dropped the proceedings, but the Commissioner imposed a service tax liability of ?7,89,288 on 75% of freight charges for September 2005 to February 2006, along with penalties. The appellant contended that they fulfilled conditions with undertaking letters from transporters, challenging the requirement of declaration by the service provider on consignment notes. The Tribunal examined the evolution of relevant notifications and CBEC clarifications, emphasizing that the benefit of abatement to GTA services could be extended in past cases based on a general declaration from the GTA. Citing various case laws, the Tribunal held that CBEC circulars cannot impose additional conditions beyond exemption notifications. Consequently, the impugned order was set aside, allowing the appeal with consequential benefits. The Tribunal highlighted the significance of CBEC clarifications, particularly circular No. 137/154/2008-CX.4, dated 21.08.2008, which allowed abatement to GTA services based on a general declaration from the GTA. The Tribunal emphasized that even before the unconditional extension of abatement to GTA services, the benefit could be availed without specific endorsements on consignment notes, as long as a general declaration was provided. The Tribunal found the appellant's undertaking letters from transporters sufficient to meet the requirements, contradicting the demand confirmation. By aligning with previous judgments and legal principles, the Tribunal emphasized that CBEC circulars cannot impose additional conditions beyond what is stipulated in exemption notifications. The Tribunal referenced various case laws to support its decision, emphasizing that CBEC circulars cannot impose conditions beyond those in exemption notifications. Notably, in the Union of India vs. Intercontinental (India) case, the Supreme Court upheld that circulars cannot add new conditions to notifications, restricting exemption scope. The Tribunal also cited Mutual Industries Limited vs. CCE & ST, Vapi, where it was held that the assessee liable to pay service tax should not be required to prove non-availment of Cenvat credit, as it was not a requirement of the notification. These cases reinforced the Tribunal's stance that CBEC circulars cannot impose additional conditions to exemption notifications.
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