2018 (2) TMI 1443 - AT - Service Tax

GTA service - Benefit of N/N. 32/2004-ST, dated 03.12.2004 - appellant were discharging service tax liability on 25% of the total freight charges paid by them - 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 - circular No.137/154/2008-CDA, dated 21.08.2008, clarifies that 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 cannot sustain. Reliance placed in the case of CCE, Allahabad Versus M/s. Sangam Structurals Ltd. 2015 (3) TMI 523 - CESTAT NEW DELHI , where it was held that conditions prescribed by the CBEC circular dated 27.7.2005 seem to go beyond the requirement of the exemption notification. It is settled law that CBEC circulars cannot restrict or expand the amplitude of an exemption notification nor can they add/subtract conditionalities thereto/there from. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Applicability of service tax liability on freight charges paid by steamer agents.
2. Interpretation of notification exemptions and conditions for availing benefits.
3. Validity of demand for service tax liability and penalties imposed.
4. Impact of CBEC circulars on the case and clarification on abatement for GTA services.
5. Consideration of past cases and general declarations from GTA for availing abatement.
6. Relevance of case laws and judicial precedents on exemption notifications and CBEC circulars.

Analysis:
1. The case involved the service tax liability of M/s Chandra Maritime Private Limited, a steamer agent, paying tax on 25% of total freight charges under Notification No.32/2004-ST. The Department disputed the exemption based on fulfillment of conditions, leading to show cause notices and subsequent revision orders imposing tax liability and penalties.

2. The Tribunal analyzed the evolution of relevant notifications, clarifications, and circulars issued by CBEC regarding abatement for GTA services. It noted that even past cases could avail abatement based on general declarations from GTA, as per circulars issued post-Finance Bill 2008 amendments. The Tribunal emphasized the importance of CBEC circulars in interpreting exemption conditions.

3. Relying on various case laws, the Tribunal highlighted that CBEC circulars cannot impose additional conditions beyond exemption notifications. It cited judgments emphasizing that circulars cannot restrict the scope of exemption notifications or add new conditions post their issuance. The Tribunal concluded that the demand for service tax liability was contradictory to CBEC clarifications and set aside the impugned order.

4. The judgment underscored the significance of general declarations from GTA for availing abatement and extended the benefit to the appellant without specific endorsements on consignment notes. By considering the chronological events, CBEC circulars, and legal precedents, the Tribunal allowed the appeal with consequential benefits as per law.

This detailed analysis of the legal judgment from the Appellate Tribunal CESTAT HYDERABAD showcases the thorough examination of issues related to service tax liability, notification exemptions, CBEC circulars, and judicial precedents, leading to a favorable decision for the appellant based on the interpretation of relevant laws and clarifications.