2019 (11) TMI 615 - AT - Service Tax

Denial of abatement claim - GTA Service - reverse charge mechanism - N/N. 32/2004-ST dated 3.12.2004 - Department proceeded to deny such abatement claim for the reason that the appellant was unable to submit declaration in respect of all the consignment notes from the Goods Transport Agencies to the effect that they have not availed the benefit of CENVAT credit - HELD THAT - The issue in dispute is the claim of abatement by the appellant to the extent of 75% in terms of N/N. 32/2004 dated 3.12.2004. The issue is no more res integra and stands settled in favour of the appellant in the case of LYKES LINE LTD. VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI-I 2016 (11) TMI 192 - CESTAT MUMBAI in which the Tribunal has taken the view that the condition if any imposed on the GTA cannot be practically complied by the recipient of service - As such, the Tribunal held that the benefit of abatement cannot be denied to the recipient of service. Appeal allowed - decided in favor of appellant.

Summary

Issues: Claim of abatement on Goods Transport Agency service under reverse charge provisions.

Analysis:
The appeal was against the Order-in-appeal No.18/2009-ST dated 10.2.2009, where the appellant, a manufacturer of excisable goods, received Goods Transport Agency (GTA) services and availed a 75% abatement on the gross value of the GTA service as per Notification No.32/2004-ST dated 3.12.2004. The department denied the abatement claim as the appellant failed to submit declarations from all consignment notes stating non-availment of CENVAT credit. The issue revolved around the appellant's right to claim abatement. The appellant argued that the demand for service tax was unjustified, citing settled case law in their favor.

The Tribunal, after hearing both parties and examining the records, found that the issue in dispute was the appellant's claim of abatement under Notification No.32/2004 dated 3.12.2004. The Tribunal referred to various case laws, including Lykes Line Ltd. Vs. CST, Mumbai: 2017 (50) STR 51 (Tri.-Mum.), where it was held that conditions imposed on the GTA could not practically be complied with by the recipient of service. Consequently, the Tribunal ruled that the benefit of abatement could not be denied to the recipient. Similar views were upheld in other cases like Venkateshwara Distributors (P) Ltd. vs. CCE: 2013 (31) STR 469 (Tri.-Del.); CCE vs. Sunhil Ceramics Pvt. Ltd.: 2008 (9) STR 530 (Tri.-Ahmd.). Therefore, the Tribunal set aside the impugned order and allowed the appeal with any consequential relief.

In conclusion, the Tribunal's decision favored the appellant, emphasizing that the abatement claim on GTA services under reverse charge provisions was valid, as supported by established case law precedent.