2018 (2) TMI 1444 - 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 Notification No.32/2004-ST to the appellant for service tax liability on GTA services.
2. Validity of the revision order issued by the original authority.
3. Interpretation of CBEC circulars and notifications regarding abatement on service tax liability for GTA services.
4. Compliance with conditions for availing abatement under relevant notifications.
5. Impact of past cases and circulars on the appellant's eligibility for abatement.

Analysis:
1. The case involved the appellant, a registered manufacturer of excisable goods, liable for service tax on GTA services under Notification No.35/2004-ST. The appellant paid service tax on 25% of freight charges under Notification No.32/2004-ST, which was challenged by the Department leading to show cause notices and subsequent revision orders.

2. The original authority initially dropped the proceedings based on undertakings from transporters but a revision notice was issued, culminating in an order confirming service tax liability, interest, and penalties. The appellant contended that they complied with procedures and were eligible for abatement under Notification No.32/2004-ST, citing decisions of other CESTAT benches in their favor.

3. The Tribunal analyzed the evolution of notifications related to service tax liability on GTA services, emphasizing the conditions for availing abatement and the significance of declarations from GTA in consignment notes. Various CBEC circulars clarified the requirements for availing abatement, including the need for a general declaration from GTA regarding non-availment of benefits.

4. Considering the clarifications provided by CBEC circulars and notifications, the Tribunal found that the appellant had obtained undertaking letters from transporters, fulfilling the conditions for abatement. The Tribunal held that the confirmation of demand was contradictory to CBEC clarifications, leading to the setting aside of the impugned order.

5. The Tribunal also relied on precedents and judgments to support its decision, emphasizing that CBEC circulars cannot impose additional conditions beyond the scope of exemption notifications. The Tribunal highlighted the appellant's eligibility for abatement based on the general declaration from GTA and allowed the appeal with consequential benefits as per law.