2024 (11) TMI 351 - AT - Service Tax

Entitlement to benefit of abetment 75% of the transportation charges - exemption notifications for Goods Transport Agency services - exemption notification No. 32/2004-ST dated 03.12.2004 and Notification No. 1/2006-ST dated 01.03.2006 - department is of the view that on verification of consignment notes issued by the Goods Transport Agency has revealed that the Goods Transport Agency have not given declaration on consignment notes to the effect of non-availment of Cenvat etc. HELD THAT -The certified photocopies as well as declaration from the service providers namely various transport agencies such as M/s. Maruti Logistics etc. it has categorically been provided by the appellant during the course of hearing to the learned adjudicating authority that the service provider transport agency has declared that they have neither availed any credit of the duty paid on import or capital goods used for providing such taxable services under Cenvat Credit Rules, 2004 nor availed benefit of the Notification No. 12/2003-ST dated 28.06.2003 nor they are going to avail the benefit in future against the invoices issued to the service recipient. On perusal of and a scrutiny of the document submitted by the appellant we are convince that substantive compliance of the conditions provided under Notification No. 12/2003-ST dated 28.06.2003 as well as Notification No. 32/2004-ST dated 03.12.2004 has been made by the appellant and therefore the benefit of abetment 75% of the transportation charges cannot be denied to them. As decided in M/S EASTERN COALFIELDS LTD VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, BOLPUR 2012 (10) TMI 492 - CESTAT KOLKATA in absence of any particular format prescribed under the respective notifications, the department insisting for declaration on each consignment note for allowing the abatement under the said Notifications is unsustainable in law. In these circumstances the declarations filed by the Goods Transport Agencies (GTA) in their letter-heads or in the respective payment bills certifying that they have not availed Cenvat credit on inputs or capital goods nor availed the benefit of exemption Notification 12/2003-S.T., dated 20-6-2003 should have been accepted by the department in extending the benefit of Notification Nos. 32/2003-S.T. and 1/2006-S.T. In view of the above findings, we do not see any merit in the impugned orders passed by the Id. Commissioner. Consequently the order is set aside and the Appeals are allowed.

Summary

Issues:
- Interpretation of exemption notifications for Goods Transport Agency services
- Compliance with conditions for availing abatement of Service Tax
- Validity of demand for Service Tax on the appellant

Interpretation of Exemption Notifications:
The appellant, engaged in cement manufacturing, received Goods Transport Agency (GTA) services and claimed exemption under Notification No. 32/2004-ST and 1/2006-ST. The issue revolved around the condition that the GTA must declare non-availment of Cenvat credit or benefits under Notification No. 12/2003-ST. The appellant contended that they met these conditions based on declarations from transport agencies. The Tribunal noted the compliance with conditions and cited precedents supporting the sufficiency of declarations on transport agency letterheads. The Tribunal held that the appellant was entitled to the abatement of 75% of transportation charges.

Compliance with Conditions for Abatement:
The Department alleged that the appellant failed to produce required declarations from transport agencies, leading to a demand for Service Tax. However, the appellant argued that they met the conditions for abatement as the transport agencies had declared non-availment of Cenvat credit and benefits under Notification No. 12/2003-ST. The Tribunal examined the submissions and found that the appellant had substantively complied with the conditions specified in the notifications, thereby rejecting the Department's contention and allowing the appeal.

Validity of Demand for Service Tax:
The Department issued a show cause notice alleging non-compliance with abatement conditions, resulting in the confirmation of charges by the Adjudicating Authority. The appellant contended that they had discharged their Service Tax liability under reverse charge and met the conditions for abatement. The Tribunal, after considering submissions and documents, concluded that the demand for Service Tax lacked legal basis as the appellant had fulfilled the conditions for availing abatement. Relying on precedents and the facts of the case, the Tribunal set aside the impugned order-in-original, allowing the appeal and pronouncing the order in favor of the appellant on 07.11.2024.