2024 (9) TMI 1545 - AT - Service Tax

Short payment of service tax - Availment of benefit of abatement on tax payable on the value of GTA services in terms of N/N. 32/2004-ST dated 3.12.2004 - appellant is a GTA and not consignee or consignor of the goods - HELD THAT - The SCN in the present case was issued on the ground that the appellant is not a GTA and therefore they are not entitled to the exemption in terms of N/N. 32/2004-ST dated 3.12.2004. It is also found that the impugned order and the Order-in-Original passed by the authorities below have gone beyond the allegations in the show cause notice because in the show cause notice there is no allegation regarding the non-fulfillment of conditions for claiming benefit of Exemption Notification. Any evidence beyond the show cause notice is not sustainable as held in the case of Suzuki Motorcycle India Private Limited 2023 (11) TMI 370 - CESTAT CHANDIGARH , therefore, on this account, the demand is liable to be set aside. It is found that the benefit of exemption notification has been denied on the ground that the conditions are not satisfied in terms of exemption notification for claiming the abatement the following conditions are satisfying, namely, (a) the Cenvat credit should not be availed on the inputs or capital goods used for transport service; and (b) the benefit of N/N. 12/2003-ST should not be availed in respect of the goods transport agency service - the department has failed to prove that the conditions mentioned in the notification are not satisfied in the present case. The department has not brought any evidence to prove that the GTA has taken CENVAT credit or availed of the benefit of the N/N. 12/2003-ST dated 20.6.2003 and therefore, the benefit cannot be denied on the basis of circular dated 27.07.2005 prescribing the procedure for declaration. The impugned order is not sustainable in law therefore, set aside - appeal allowed.

Summary

Issues:
- Appeal against impugned order dated 16.12.2013 upholding Order-in-Original and rejecting appeal.
- Appellant engaged in manufacturing oral and other care products, received GTA services from April 2005 to September 2005.
- Show cause notice issued proposing demand of service tax, interest, and penalty.
- Adjudicating authority confirmed demand of service tax stating appellant did not produce declarations from GTA service providers.
- Commissioner (Appeals) upheld Order-in-Original.
- Appellant challenges order on grounds of non-fulfillment of conditions for claiming benefit of Exemption Notification.
- Dispute over abatement of service tax on GTA services under Notification No. 32/2004-ST.
- Department failed to prove GTA availed CENVAT credit or benefit of Notification No. 12/2003-ST.
- Legal arguments presented regarding interpretation of Notification conditions and circulars.
- Dispute over interest and penalty.
- Tribunal's analysis of evidence and legal precedents cited by both parties.
- Tribunal's decision setting aside impugned order and allowing the appeal.

Analysis:
The appeal before the Appellate Tribunal CESTAT CHANDIGARH challenged an order upholding the demand of service tax, interest, and penalty against the appellant, a manufacturer of oral and other care products, for receiving GTA services. The show cause notice alleged incorrect availing of abatement benefits under Notification No. 32/2004-ST. The adjudicating authority confirmed the demand, citing lack of declarations from GTA service providers. The Commissioner (Appeals) upheld this decision, leading to the present appeal. The appellant argued that the order went beyond the show cause notice's allegations and contested the non-fulfillment of conditions for claiming the Exemption Notification's benefits. Legal precedents were cited to support the argument that the order should be based on the show cause notice's allegations. The appellant claimed to have correctly availed the abatement benefits and challenged the department's failure to prove GTA's CENVAT credit or benefit availed under Notification No. 12/2003-ST.

The appellant further argued that the conditions for claiming the exemption were practically impossible to comply with and criticized the department's reliance on circulars not supported by statutory requirements. Legal cases were cited to support the argument that circulars cannot impose new conditions beyond statutory notifications. The Tribunal analyzed the evidence and legal arguments presented by both parties, emphasizing the importance of the show cause notice's allegations in adjudication proceedings. The Tribunal found that the department failed to prove non-satisfaction of conditions mentioned in the notification, leading to the denial of benefits. Precedents were cited to support the Tribunal's decision to set aside the impugned order and allow the appeal. The Tribunal's decision was based on the appellant's case being covered by various legal precedents cited during the proceedings, ultimately leading to the appeal being allowed with consequential relief as per law.