2014 (7) TMI 934 - AT - Service Tax

GTA service - Exemption under Notification No. 34/2004-ST dated 03/12/2004 - obiter dicta - Held that - Prima facie it appears that the appellant is not eligible for exemption because the entire goods transported by the GTA in the present consisted of only a single consignment and the freight charges for the single consignment exceeded ₹ 750/- and therefore, in view of the decision of this Tribunal in the case of Bellary Iron & Ores Pvt. Ltd. (2009 (12) TMI 150 - CESTAT, BANGALORE), the appellant is prima facie not eligible for the exemption. The reliance placed on the decision of the Hon ble Bombay High Court deals with an obiter dicta. In the Bellary Iron & Ores Pvt. Ltd. case, the findings given therein are not obiter dicta of this Tribunal. The Tribunal discussed the entire notification and thereafter considered its scope and passed an order. Therefore, the same cannot be considered as an obiter dicta. As regards the reliance placed on the decision in the case of Gondal Prestressed Concrete, it is only an interim order and it is a settled position in law that interim order does not lay down any ratio. The appellant has also not pleaded any financial hardship - appellants have not made out any case for complete waiver of the dues adjudged against them - stay granted partly.

Summary

Issues:
Interpretation of Notification No. 34/2004-ST dated 03/12/2004 for service tax exemption.

Analysis:
1. The appeal challenged an order confirming service tax demand, interest, and penalty against the appellant. The appellant argued that the issue revolved around the interpretation of Notification No. 34/2004-ST. The notification grants exemption from service tax based on the gross amount charged on consignments transported in a goods carriage. The appellant contended that since the freight charged was below &8377; 1,500 for the entire consignment received by them, they should be exempt from service tax. Reference was made to a Tribunal decision supporting this interpretation.

2. The Revenue, represented by the Superintendent (AR), countered by citing a Tribunal decision in the case of Bellary Iron & Ores Pvt. Ltd. The decision stated that if an assessee incurs freight charges up to &8377; 1,500 per consignment, they are not eligible for exemption. The appellant argued that this decision was merely an obiter dicta and not binding, citing a Bombay High Court case to support their stance.

3. Upon considering both arguments, the Tribunal found that the appellant did not qualify for exemption as the freight charges for the single consignment exceeded &8377; 750. The Tribunal distinguished between obiter dicta and binding decisions, noting that the Bellary Iron & Ores Pvt. Ltd. case provided a substantive ruling. The Tribunal also clarified that interim orders, like the one cited by the appellant, do not establish legal precedent. Additionally, the appellant failed to demonstrate financial hardship.

4. Consequently, the Tribunal ruled that the appellant must make a pre-deposit of the service tax demand within eight weeks. Upon compliance, the pre-deposit for interest and penalty would be waived, and recovery stayed during the appeal process. The decision was based on a thorough analysis of the legal and factual aspects of the case, ultimately denying the appellant's request for a complete waiver of the dues adjudged against them.