2019 (7) TMI 905 - HC - Service Tax

GTA Service - Benefit of N/N. 32/2004 ST dated 03.12.2004 - abatement of 75% from the gross freight value - denial of benefit in the absence of any declaration furnished by the transport agencies from whom the services in question were availed by the assessee, to the effect that the transport agents had not taken CENVAT credit on inputs / capital goods - Circular No.5/1/2007 -S.T. dated 12.03.2007 - HELD THAT - It is very clear that for availing the exemption in terms of the said notification No.32/2004, satisfying the conditions stipulated in the said proviso with the help of the declaration of the service provider viz., transport agency was necessary and they could not be ignored - If such exemption was allowed to the assessee, without satisfying all the conditions of the proviso, it would violate the very basis of the exemption provided in the Notification No.32/2004 dated 03.12.2004. It is trite law that the exemption notifications are to be strictly construed to the conditions stipulated in the notification for availing exemption and has to be complied with by the concerned assessee. There is no merit in the submissions made at Bar by the learned counsel for the assessee that even without declaration as stipulated in the notification, the assessee was entitled to such exemption, is over simplifying or glossing over the conditions itself, which cannot be permitted. The learned Tribunal was perfectly justified in denying such exemption in the cases where no such declaration from the service providers viz., transport agency was forthcoming from the assessee - Appeal dismissed - decided against appellant.

Issues:
1. Exemption under Notification No.32/2004 ST dated 03.12.2004.
2. Requirement of declaration from transport agencies for availing exemption.
3. Interpretation of conditions for exemption under the notification.
4. Compliance with conditions stipulated in the notification.
5. Justifiability of denial of exemption by the Tribunal.
6. Applicability of previous judgments to the present case.

The judgment pertains to the denial of exemption to the appellant by the Customs Excise and Service Tax Appellate Tribunal (CESTAT) under Notification No.32/2004 ST dated 03.12.2004. The Tribunal dismissed the appeals filed by the assessee, holding that exemption of 75% abatement from the gross freight value was not available due to the absence of a declaration from the transport agencies confirming non-availment of CENVAT credit on inputs/capital goods. The appellant argued that exemption was allowed where such declarations were furnished, citing relevant case law. The Revenue supported the Tribunal's decision. The Tribunal's order was based on the necessity of complying with the conditions of the notification, as per the circular issued by the Central Board of Excise and Customs. The appellant's contention that exemption should be granted without the required declaration was rejected. The judgment emphasized strict compliance with exemption conditions and the need for a declaration from the service provider to prove satisfaction of the proviso's conditions.

The Notification No.32/2004 dated 03.12.2004 provided an exemption for taxable services by a goods transport agency subject to specific conditions. The Central Board of Excise and Customs issued Circular No.5/1/2007 -S.T. clarifying the procedures for availing the exemption, emphasizing the importance of a declaration by the service provider to confirm compliance with the exemption conditions. The circular highlighted that any person liable to pay service tax must fulfill the conditions prescribed in the notification, including providing a declaration on the consignment note. Failure to produce such a declaration would result in denial of the exemption, as observed in the present case where the appellant failed to furnish the necessary declaration from the transport agencies, leading to the denial of exemption by the Tribunal.

The judgment reiterated that exemption notifications must be strictly construed, and compliance with the stipulated conditions is mandatory for availing the exemption. The Tribunal's decision to deny exemption in cases lacking the required declaration from the service provider was upheld. The judgment distinguished previous judgments cited by the appellant, emphasizing that compliance with the conditions of the notification, including the declaration from the transport agency, was essential for claiming exemption. The Tribunal's decision to reject the appeals was deemed justified, and the appellant's argument that exemption should be granted without the necessary declaration was dismissed.

In conclusion, the High Court upheld the Tribunal's decision to deny exemption to the appellant under Notification No.32/2004 ST dated 03.12.2004 due to the absence of declarations from the transport agencies confirming non-availment of CENVAT credit. The judgment emphasized the importance of strict compliance with exemption conditions and the necessity of providing the required declaration to prove eligibility for exemption. The appellant's appeals were dismissed, and costs were not awarded.

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