2009 (5) TMI 340 - AT - Service Tax

The demand is confirmed after denying the benefit of Notification No. 34/04 on the ground that the applicant had not proved that the GTA service provider has not availed credit in respect of input or capital goods and benefit of Notification No. 12/03 has not been availed. - We find that applicant filed affidavits/certificate of service providers to prove that credit of input or capital goods is not availed nor benefit of Notification No. 12/03 is availed. This requires verification. In these circumstances we find that the matter requires reconsideration by the adjudicating authority and to pass an appropriate order after verifying the evidence produced by the applicant to show that conditions of the notifications are fulfilled. The impugned order is set aside after waiving the pre-deposit of service tax and penalties and the matter is remanded to adjudicating authority to re-determine the issue after affording opportunity of hearing to the appellant. The appeal is disposed by way of Remand.

Summary

Issues:
Waiver of pre-deposit amount of service tax and penalties based on Notification No. 34/04 and Notification No. 12/03.

Analysis:
The applicant sought waiver of pre-deposit amount of service tax and penalties amounting to Rs. 70,14,087/- based on the denial of benefits under Notification No. 34/04. The demand was confirmed as the applicant failed to prove that the GTA service provider did not avail credit for input or capital goods and did not benefit from Notification No. 12/03. The applicant contended that a declaration with the necessary stamp indicated non-availment of credit and benefit, supported by affidavits/certificates from service providers. Citing the case of Areva T&D India Ltd. v. Commr. of Central Excise, Allahabad, the applicant argued that the conditions of Notification No. 34/04 were met, rendering the demand unsustainable.

The Revenue argued that since the applicants were benefiting from the Notification, the burden of proof lay with them to demonstrate fulfillment of conditions. They pointed out that the same stamp was used on all documents for availing credit, despite different service providers, justifying the confirmation of demand due to non-compliance with the notification's conditions. The Tribunal acknowledged the affidavits/certificates provided by the applicant but deemed further verification necessary. Consequently, the impugned order was set aside, pre-deposit of service tax and penalties were waived, and the matter was remanded to the adjudicating authority for a re-evaluation based on the evidence presented. The Tribunal directed the authority to reconsider and issue a new order after scrutinizing the evidence and providing the appellant with a hearing opportunity. The appeal was disposed of through remand, emphasizing the need for a thorough review by the adjudicating authority.