2020 (3) TMI 261 - AT - Service Tax

GTA Service - reverse charge mechanism - exemption where transportation charges are less than ₹ 1500/- - Commissioner (Appeals) did not extend the benefit on the ground that no documentary evidences stand placed before him - extended period of limitation - revenue neutrality - HELD THAT - Even if it is accepted that on account of lack of documentary evidence benefit of exemption of ₹ 1500/- charge is not to be extended to them, even then they are entitled to the abatement provided in terms of Notification No.12/2003 upto an extent of 75%. As such only 25% of service tax was payable by them, which also was available to them as credit. As such the entire exercise was Revenue neutral, in such case the extended period cannot be invoked. Reliance can be placed in the case of JET AIRWAYS (I) LTD. VERSUS COMMISSIONER OF SERVICE TAX MUMBAI 2016 (8) TMI 989 - CESTAT MUMBAI as confirmed by JET AIRWAYS (INDIA) LTD. VERSUS COMMISSIONER 2018 (1) TMI 210 - SC ORDER . Extended period of Limitation - HELD THAT - Wherever an assessee was entitled to the credit of the tax/duty required to be paid by him, he is at no loss and there can be no mala fide on his part. In such a scenario the longer period will not be available to the revenue. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Liability of service tax on GTA services received by a clearing and forwarding agent.
2. Exemption of transportation charges less than ?1500.
3. Dispute regarding service tax demand for the period 2011-12 to 2013-14.
4. Benefit of exemption and abatement under Notification No.12/2003.
5. Invocation of extended period for revenue recovery.

Analysis:
1. The appellant, a clearing and forwarding agent, was procuring GTA services and liable to pay service tax on reverse charge basis. Exemption was provided for transportation charges less than ?1500.

2. A show cause notice raised a service tax demand for ?20,03,139.00 for the period 2011-12 to 2013-14. The appellant claimed exemption for consignments below ?1500 per trip, but the Commissioner denied it due to lack of documentary evidence, confirming the demand.

3. The appellant argued for abatement under Notification No.12/2003, claiming only 25% service tax was payable, which was creditable. Citing Tribunal decisions and Supreme Court rulings, the appellant contended that the extended period cannot be invoked if the exercise is revenue neutral.

4. The Tribunal agreed with the appellant's argument, stating that if an assessee is entitled to credit for the tax/duty paid, there is no loss or mala fide intention. In such cases, the longer recovery period is not available to the revenue department.

5. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief to the appellant, emphasizing that the decision was dictated and pronounced in open court.