2023 (12) TMI 438 - AT - Service Tax

Benefit of the exemption notification no. 32/2004- ST dated 3.12.2004 - Denial of benefit on the ground that he had produced only the photo copy of the declaration of three service providers on their letter head for which the authenticity of the documents could not be verified - HELD THAT - The appellant herein while submitting the photo copies of the declaration had sufficiently complied with the conditions of the notification to state that they have not taken the credit of duty paid on inputs or capital goods and did not avail the benefit under the notification no. 12/2003-ST dated 20th June, 2003. During the course of hearing, the learned Counsel for the appellant had produced the original copies of the said declaration, and an opportunity was granted to the learned Authorised Representative for the Revenue to examine the same and on perusal thereof, he did not find any infirmity in the photocopy in comparing the same with the original certificate. There are similar declarations by other GTA s on record. There is, therefore, no reason to deny the benefit of the exemption notification to the appellant - it is also found that Circular No.B/16/2005 TRU dated 27.7.2005, has clarified that in cases where liability for tax payment is on the consignor or consignee, a declaration by the goods transport agency in the consignment note issued, to the effect that neither credit on inputs or capital goods used for provision of service has been taken nor the benefit of notification no. 12/2003 Service Tax has been taken by them may suffice for the purpose of availment of abatement by the person liable to pay service tax. The issue decided in favour of the appellant on merits, the issue of levying interest or penalty does not survive - The invocation of the extended period is also not sustainable. The impugned order deserves to be set aside - The appeal stands allowed with consequential benefit.

Summary

Issues involved:
The appeal challenges the Order-in-Appeal affirming service tax demand under section 73 of the Finance Act, 1994, along with interest and penalty.

Details of the Judgment:

Issue 1: Compliance with exemption notification
The appellant, engaged in trading of yarn, availed services from Goods Transport Agencies (GTA) for material transportation. The appellant claimed exemption under notification no. 32/2004-ST, which exempts service tax on transport of goods by road. The show cause notice alleged non-compliance, leading to an ex parte adjudication confirming the demand. The appellant, unaware of the order, later appealed, submitting declarations from transporters. The Tribunal found the appellant had complied with the notification by providing declarations, as confirmed by original copies during the hearing. The Tribunal held that the appellant was entitled to the exemption as per the notification and set aside the impugned order.

Conclusion:
The Tribunal allowed the appeal, finding in favor of the appellant on the compliance issue, thereby nullifying the demand, interest, and penalty. The Tribunal also deemed the invocation of the extended period as unsustainable.