2010 (2) TMI 237 - AT - Service Tax

Technical Inspection & Certification Service- Notification No.12/2003-ST, dt.20.06.03-The show cause notice was issued to the respondents proposing denial of CENVAT credit attributable to 75% abatement of the gross value charged amounting to ₹ 87, 89,764/- with interest. Further, penalty was also proposed to be imposed. Held that- the requirements prescribed by the Board as per circular cannot be mandatory and cannot be used for denying substantive rights. It is not the case of the Revenue that the appellants have not received the service or service tax has not been paid. Therefore, we find that the Commissioner s order is just and fair and does not require any interference. Further, as rightly pointed out, in the absence of an appeal against the Tribunal s order, remanding the matter for verification of evidence, that order becomes final and Revenue cannot be challenge the impugned order, ignoring the remand order. Accordingly, we do not find any merit in the appeal filed by the Revenue and reject the same.

Summary

Issues:
1. Liability of service tax on Goods Transport Service due to lack of declaration in consignment note.
2. Interpretation of circular regarding availment of abatement benefit.
3. Compliance with conditions for availing CENVAT credit and benefit of notification.

Analysis:
1. The case involved the liability of the respondents to pay service tax on Goods Transport Service due to the absence of a declaration in the consignment note regarding the non-availment of CENVAT credit or benefit of Notification No.12/2003-ST. The Commissioner observed that the respondents provided a certificate from transporters stating no availing of credit or benefit for a portion of the demand, dropping that amount. However, the remaining service tax credit was denied as the required declaration was not provided, leading to the appeal by the Revenue against the Commissioner's order.

2. The Revenue argued that the Commissioner erred by relying on a circular allowing abatement benefit extension only for cases prior to July 2005 if declarations from the Certification Branch were produced. They contended that since the credit period was post-July 2005, the decision was incorrect. In response, the advocate stated that the circular cannot override notification provisions, emphasizing that the Board's circular only pertains to implementation modalities and is not mandatory. The Commissioner's order was issued post a Tribunal remand to produce evidence on non-availment of CENVAT Credit and notification benefits, and it was argued that the Commissioner's decision was within the remand scope.

3. The Tribunal analyzed Notification No.32/2004-ST, which allows 75% abatement of the gross amount charged for service tax calculation, subject to non-availment of CENVAT credit and notification benefits. The Board's clarification on endorsement requirements on consignment notes was considered. The Tribunal noted that the notification and service receiver liability did not specify such conditions, indicating that Board-prescribed requirements from the circular are not mandatory to deny substantive rights. As the service was received and tax paid, the Commissioner's order was deemed fair and just. The Tribunal emphasized that without an appeal against the Tribunal's remand order, challenging the Commissioner's decision was not permissible, leading to the rejection of the Revenue's appeal.

This detailed analysis of the judgment highlights the issues, arguments presented, legal interpretations, and eventual decision by the Tribunal, providing a comprehensive understanding of the case.