2013 (5) TMI 564 - AT - Service Tax

Claiming abatement - Notification No. 32/2004-ST - The issue involved in this case is regarding the differential service tax liability that has been demanded and confirmed against the appellant for availing ineligible abatement of 75% of the value of the freight charge by the GTA services under Notification No.32/04. Held that - In the case of Commissioner of Service Tax, Ahmedabad Vs. Cadila Pharmaceuticals Ltd. 2013 (1) TMI 353 - GUJARAT HIGH COURT an identical issue has settled the law, the issue in this case is squarely covered in favour of the assessee. As regards the finding of the non mention benefit of Notification No.12/03-ST, the judgment of the coordinate bench in the case of Indian Oil Corporation Ltd. 2010 (12) TMI 786 CESTAT Mumbai , holding, that said notification will apply only to the service provider, while in this case the appellant is not a service provider but a manufacturer and the service tax liability under GTA has been fastened on him by way of reverse charge mechanism. Thus, appeal is allowed.

Summary

Issues Involved:
Differential service tax liability due to ineligible abatement claimed by the appellant under Notification No.32/04.

Analysis:
The appeal was filed against an order confirming service tax demand for claiming a 75% abatement on freight charges by Goods Transport Operators. The appellant relied on a general declaration and legal precedents to support their case. The first appellate authority upheld the original order, leading to the appeal. The issue revolved around the sufficiency of the certificate provided by the transport agency and the applicability of Notification No.12/03-ST.

The appellant argued that the general declaration sufficed, citing legal decisions in support. They contended that as a recipient under reverse charge mechanism, they were not bound by Notification No.12/03-ST. The Assistant Commissioner argued that the certificate did not fulfill the notification's requirements, emphasizing strict compliance as per legal precedent.

The Tribunal analyzed the submissions and records, focusing on the certificate's contents and legal interpretations. They referenced precedents like Indian Oil Corporation Ltd. and Andhra Pradesh Paper Mills Ltd. to support their decision. The Tribunal found merit in the appellant's plea, noting that the restriction on abatement eligibility applied to service providers, not recipients like the appellant under reverse charge mechanism.

Additionally, the Tribunal referred to the High Court's decision in Cadila Pharmaceuticals Ltd., reinforcing the appellant's position. They highlighted the importance of strict compliance with notification conditions and the applicability of abatement benefits to the appellant as a recipient. Ultimately, the Tribunal allowed the appeal, setting aside the impugned order based on the legal interpretations and precedents cited.

In conclusion, the judgment resolved the issue of differential service tax liability by clarifying the eligibility of the appellant for abatement under Notification No.32/04. The decision emphasized the distinction between service providers and recipients under reverse charge mechanism, ensuring compliance with notification requirements for claiming abatement benefits.