2016 (11) TMI 192 - AT - Service Tax

Denial of benefit of N/N. 32/2004-ST dated 3.12.2004 by which 75% abatement from the gross value of GTA service has been provided - GTA service - reverse charge mechanism - Held that - the appellant is discharging service tax on reverse charge basis as a recipient of service. Firstly, the condition if any imposed on goods transport agency cannot be practically complied with by the recipient of service. Secondly, the department could not prove that the goods transport agency has availed the benefit of cenvat credit and Notification 12/2003-ST. The Notification does not provide any condition that any declaration as sought by the department is required to be obtained from the goods transport agency and produce to the department in order to avail the Exemption Notification. Therefore, the Board circular which prescribes the procedure for obtaining the declaration, is not flowing from the Notification. In our view, the Board cannot prescribe any condition or procedure for availing any Exemption Notification. If at all any procedure is required, it should be part and parcel of the Notification, which is not the case here. The appellant had provided a declaration from the goods transport agency on their letterhead. It is very surprising to note that the lower authority has discarded the said certificate merely on the ground that the declaration was obtained on the letterhead and not on each consignment note. Once a transport agency gives the declaration that they are not availing the cenvat credit, that means they are not availing cenvat credit in all the transactions. Therefore, individual consignment need not bear such declaration. As per the above position, we are of the considered view that the ground on which the Exemption Notification was denied to the appellant is absolutely incorrect - Exemption Notification cannot be denied - appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of Exemption Notification No.32/2004-ST for Goods Transport Agency service due to non-compliance with declaration requirements.

Detailed Analysis:

1. Denial of Exemption Notification:
The judgment addresses the confirmation of service tax demand for a Goods Transport Agency (GTA) service, where the appellant paid service tax on a reverse charge basis. The denial of the Exemption Notification No.32/2004-ST, providing 75% abatement, was based on the appellant's alleged failure to obtain a specific declaration on the consignment note as required by a circular. The appellant challenged this denial, arguing that the circular's procedure was not legally binding and that the Notification itself did not mandate such a declaration process. The appellant contended that a general declaration from the transport agency sufficed, and individual consignment declarations were unnecessary. The judgment highlights that the Notification did not specify the need for the declaration prescribed by the circular, and the department failed to prove the agency's non-compliance with cenvat credit and Notification 12/2003-ST conditions.

2. Legal Interpretation and Precedents:
The appellant's counsel emphasized that the circular's procedural requirements should not override the Notification's explicit conditions. The Tribunal agreed, asserting that the Board cannot add conditions beyond what the Notification states. The judgment emphasized that the appellant's submission of a declaration from the transport agency should have been considered valid, and the lower authority erred in disregarding it based on the format (letterhead vs. consignment note). The Tribunal cited various precedents to support its decision, indicating that the issue had been addressed consistently in previous judgments.

3. Conclusion and Decision:
After considering both parties' arguments, the Tribunal concluded that the denial of the Exemption Notification to the appellant was unfounded. The judgment highlighted that the circular's additional requirements did not align with the Notification's provisions and that the appellant's compliance with the general declaration sufficed. Consequently, the Tribunal overturned the impugned order, allowing the appeal and granting consequential relief to the appellant based on the legal interpretation and precedents cited.