2015 (10) TMI 574 - AT - Service Tax

Waiver of pre-deposit - GTA service reverse charge - Appellant hires vehicles for transporting goods from the premises of consignors to that of the consignees and affirms the liability of service tax to be paid by the consignor or consignee of the goods in view of Section 68 of the Finance Act, 1994 read with Rule 2 (1) (d) (v) of Service Tax Rules, 1994 Held That - Demand of CENVAT Credit rests on appreciation of evidences adduced by both sides Prescribed amount needs to be deposited within time to waive and recover stay during the pendency of the appeal Partial stay granted.

Summary

Issues Involved: Application for waiver of Service Tax, CENVAT Credit, and penalty imposed under Sections 77 and 78 of the Finance Act, 1994.

Analysis:

Issue 1: Service Tax Liability
The applicant hired vehicles for transporting goods, and the Department considered the expenses as Goods Transport service, confirming the demand of Service tax under the category of GTA service. The advocate for the applicant argued that under the reverse charge mechanism, the liability to pay service tax on GTA Service rests with the consignor or consignee as per Section 68 of the Finance Act, 1994. The Tribunal found that the applicant had procured trucks/vehicles for transporting goods and issued consignment notes in their name, indicating that the liability to pay service tax falls on the consignor or consignee. Therefore, the Tribunal acknowledged a prima facie case for waiver of the demand on GTA Service.

Issue 2: CENVAT Credit Confirmation
Regarding the confirmation of recovery of CENVAT Credit, the demand was based on the input service providers not being in existence. The advocate for the applicant presented evidence showing the existence of these firms, which was not considered by the Commissioner. The Tribunal noted that the issue of CENVAT Credit involves the appreciation of evidence from both sides, which would be examined during the appeal's disposal. The applicant offered to deposit a certain amount, which the Tribunal deemed reasonable at that stage. The Tribunal directed the applicant to deposit the specified amount within a given timeframe, after which the balance dues would be waived, and recovery stayed during the appeal's pendency.

In conclusion, the Tribunal granted partial relief to the applicant by acknowledging the prima facie case for waiver of the demand on GTA Service under the reverse charge mechanism. The Tribunal also considered the evidence presented regarding the CENVAT Credit issue and directed the applicant to make a specified deposit to avail further relief during the appeal process. Compliance was required to be reported by a specific date following the Tribunal's order.