2019 (12) TMI 722 - AT - Service Tax

Benefit of exemption notification No. 34/2004-ST dt.03.12.2004 - GTA services - Exemption based on gross amount charged on consignment transported in goods carriage - HELD THAT - This exemption is available only in cases where the gross amount charged for consignments transported in goods carriage does not exceed 1, 500/- or gross amount on individual consignment transported in goods carriage does not exceed 750/- - in the present case the appellant has not put forth any evidence to show that transportation charges have fallen below the threshold limits which would have entitled them to the benefit of exemption notification - benefit of notification cannot be extended. Benefit of N/N. 41/2007-ST dt.06.10.2007 - services used for export of goods from the whole of service tax leviable thereon - HELD THAT - The words used are NOT used in relation to export of goods . In this case GTA services were availed for transporting goods from their Kodur unit to Chennai. Thereafter the Chennai unit in turn exported the goods. While this transportation may be in relation to export of goods there is no sufficient evidence to show that this transportation is actually for export of goods - Secondly the exemption notification does not provide the exemption straightaway but is subject to certain conditions and available by way of refund of service tax paid on the specified services used for export of goods. Also this exemption is available by way of refund and not at the source. This does not automatically allow the appellant to NOT pay service tax which they were liable to pay - benefit of notification cannot be extended. Extended period of limitation - HELD THAT - The appellant was fully aware of their liability to pay service tax on GTA services and had indeed obtained registration for the same services received in their Chennai unit but had not done so in respect of the Kodur unit. Therefore the appellant cannot plead ignorance about their liability to pay service tax and take registration and follow the appropriate procedures - the extended period of limitation has been correctly invoked. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Entitlement to exemption notification No. 34/2004-ST
2. Entitlement to exemption notification No. 41/2007-ST
3. Correct invocation of extended period of limitation

Analysis:

Issue 1: Entitlement to Exemption Notification No. 34/2004-ST
The appellant claimed exemption under Notification No. 34/2004-ST, which exempts service tax on GTA services if the gross amount charged per consignment does not exceed specified limits. The tribunal referred to a previous case for interpretation, stating that the exemption applies only if the freight charges per consignment do not exceed the thresholds. In this case, the appellant failed to provide evidence that their transportation charges met the exemption criteria. The tribunal upheld that the appellant did not qualify for the exemption based on the lack of supporting documentation.

Issue 2: Entitlement to Exemption Notification No. 41/2007-ST
The appellant also sought benefit under Notification No. 41/2007-ST, which exempts services used for exporting goods subject to specific conditions. The tribunal noted that the exemption requires a refund of service tax paid on specified services used for exporting goods, not an outright exemption from paying service tax. The appellant did not fulfill the necessary conditions for claiming this exemption, as there was no evidence to prove that the transportation services were exclusively for exporting goods. Therefore, the tribunal rejected the appellant's claim under this notification.

Issue 3: Correct Invocation of Extended Period of Limitation
The tribunal examined the invocation of the extended period of limitation and found that the appellant was aware of their liability to pay service tax on GTA services. Despite being registered for similar services in their Chennai unit, the appellant had not fulfilled the requirements for the Kodur unit. This demonstrated the appellant's knowledge of their tax obligations. Consequently, the tribunal concluded that the extended period of limitation was appropriately invoked due to the appellant's awareness of their tax liability.

In conclusion, the tribunal upheld the original authority's decision, dismissing the appellant's appeal. The judgment emphasized the importance of meeting exemption criteria, fulfilling conditions for tax refunds, and complying with tax obligations to avoid the invocation of extended limitation periods.