2020 (6) TMI 251 - AT - Service Tax

Short payment of Service Tax - GTA Services - reverse charge mechanism - N/N. 13/2008 dated 01.03.2008 - non-filing of requisite declaration acknowledging that no Cenvat credit has been availed by the Appellant with respect to the exempted amount of service tax has not been filed - whether such declaration is mandatory for seeking the benefit of the exemption notification? - Time Limitation - HELD THAT - The GTA Services stands excluded from the definition of output service w.e.f 01.07.2012. No question of availability of Cenvat credit is any more available to the recipient of GTA Services. The demand of declaration about not availing the Cenvat credit stands redundant in view of the said amendment. The notifications are extending substantial benefit to the assessee. The same cannot be denied for want of meagre procedural lapse. In the present case there is not even the said procedural lapse. Denying the benefit of the impugned notification for alleging the payment by the Appellant as short is, therefore, opined to be a wrong finding. Adjudicating authority below are required to be updated with respect to the latest laws and the respective amendments while adjudicating the respective issues. Time Limitation - HELD THAT - Department could not have proved the mandate of any such declaration. Accordingly, no question of suppression of facts on part of Appellant at all arises as is otherwise alleged by the department. The adjudicating authority is held to have erroneously formed the opinion about mis-representation and suppression on part of the Appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Alleged short payment of Service Tax by the appellant.
2. Requirement of declaration for availing exemption under Notification No. 13/2008.
3. Interpretation of relevant notifications and circulars.
4. Applicability of Cenvat credit rules and amendments.
5. Entitlement of the appellant for exemption without conditions.

Analysis:

Issue 1:
The appellant, a Goods Transport Agency service recipient, faced allegations of short payment of Service Tax. The department observed discrepancies in the payment and issued a show cause notice for recovery. The initial order-in-original confirmed the proposed recovery, which was upheld by the Commissioner (Appeals), leading to the appeal before the Tribunal.

Issue 2:
The crux of the matter revolved around the requirement of a declaration for availing the benefit of exemption under Notification No. 13/2008. The appellant argued that the declaration was unnecessary as per relevant circulars and amendments in the definition of output service. The department, however, emphasized the necessity of the declaration based on earlier notifications.

Issue 3:
The Tribunal analyzed the notifications and circulars post the one relied upon by the Commissioner (Appeals). It highlighted Notification No. 13/2008, which exempted Goods Transport Agency services from a portion of Service Tax and clarified that no declaration about Cenvat credit was required. The subsequent circular further supported this stance, emphasizing unconditional exemption for 75% of the freight amount.

Issue 4:
The Tribunal delved into the amendments in the Cenvat credit rules, specifically Rule 2(p) post-July 2012. It clarified that Goods Transport Agency services were excluded from the definition of output service, making the question of Cenvat credit availability irrelevant for service recipients. This clarification rendered the demand for a declaration about Cenvat credit obsolete.

Issue 5:
Ultimately, the Tribunal ruled in favor of the appellant, setting aside the order under challenge. It concluded that the appellant was entitled to the exemption without any conditions, emphasizing the substantial benefits extended by the notifications. The Tribunal criticized the adjudicating authority for not being updated on the latest laws and amendments, leading to an erroneous finding against the appellant.

In conclusion, the Tribunal allowed the appeal, highlighting the appellant's entitlement to the exemption without the need for a declaration about Cenvat credit, as per the relevant notifications and amendments in the Cenvat credit rules.