2018 (2) TMI 1251 - AT - Service Tax

GTA Service - reverse charge - concessional rate of tax @25% - Notification No. 32/2004-ST - Department took the view that notification exemption is not available to appellant as there was no evidence to show that the conditions of the notification were fulfilled. Held that - On appreciating the aforesaid chronological events and various clarifications of CBEC and in particular the 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 - Decided in favor of assessee.

Summary

Issues:
1. Applicability of notification exemption to the appellant.
2. Validity of the revision order passed by the CCE.
3. Interpretation of various circulars issued by CBEC regarding abatement in service tax liability for GTA services.

Analysis:
1. The issue of the applicability of notification exemption to the appellant was central to the case. The appellant, a Central Excise manufacturer of auto parts, was discharging service tax liability on GTA services based on Notification No. 35/2004-ST. The Department contended that the exemption was not available to the appellant due to lack of evidence fulfilling notification conditions. The original authority initially dropped the proceedings, but a revision order was issued confirming service tax liability. The appellant argued that they were eligible for abatement under Notification No. 32/2004 based on declarations from transporters. The Tribunal analyzed past decisions and circulars to conclude that the appellant was entitled to the abatement, setting aside the demand for service tax and penalties.

2. The validity of the revision order passed by the CCE was challenged by the appellant. The CCE's order modified the original authority's decision, imposing service tax liability, interest, and penalties. The appellant contended that the revision order was not legal, as they had complied with procedures and obtained declarations from transporters as required for availing abatement. The Tribunal examined the chronological events, CBEC clarifications, and circulars, finding that the appellant had fulfilled requirements for abatement. The Tribunal ruled in favor of the appellant, highlighting inconsistencies in the CCE's order with CBEC clarifications.

3. The interpretation of various circulars issued by CBEC regarding abatement in service tax liability for GTA services played a crucial role in the judgment. The Tribunal referenced Circulars clarifying conditions for availing abatement, especially in cases where liability for tax payment was on the consignor or consignee. The Tribunal emphasized the importance of general declarations from GTAs to avail abatement, even in past cases. Relying on past case laws and judgments, the Tribunal concluded that CBEC circulars could not add new conditions to exemption notifications. The Tribunal's decision was influenced by the consistency in interpreting circulars and notifications to provide relief to taxpayers.