2009 (11) TMI 457 - AT - Service Tax

Stay - Commissioner demanded Service tax of Rs. 55,367/- found to be due from the appellants towards GTA services availed by it during the period September, 2005 to February, 2006 and imposed penalty on the appellant under Sections 76 & 78 of the Act. Abatement under Notification No. 32/2004-ST denied in original order while impugned order demanding tax on the other ground. Held that- demand not in accordance with proposals in SCN and prima facie not sustainable.

Summary

Issues:
1. Revision of orders by the Commissioner demanding Service tax and imposing penalties on the appellant for GTA services availed.
2. Denial of benefit of specific Notifications by the original authority.
3. Eligibility of the appellants for the benefit of Notification based on tax payment under Section 68(2) of the Act.
4. Prima facie sustainability of the liabilities adjudged against the appellants.

Analysis:

1. The Commissioner passed orders revising the Assistant Commissioner's decisions, demanding Service tax and imposing penalties on the appellant for availing GTA services. The orders in Appeal No. ST/661/09 and Appeal No. ST/662/09 demanded Service tax amounts and penalties under Sections 76 & 78 of the Finance Act, 1994. The appellant moved applications for waiver of pre-deposit, arguing that the impugned orders went beyond the show cause notice's proposals adjudicated by the original authority.

2. The original authority denied the benefit of Notification No. 32/04 and 1/06 S.T. to the appellants, citing their tax payment under Section 68(2) of the Act as the reason. However, a subsequent Order No. 5/1/07 S.T. issued by CBEC under Section 37B extended the benefit to assessees paying Service tax under GTA in terms of Section 68(2). The impugned order found the appellants ineligible for the Notification's benefit on various other grounds, leading to the demand for tax and penalties.

3. In the hearing, the learned SDR did not dispute the factual position presented by the appellants. Upon careful consideration of the case records and submissions from both sides, the Tribunal found the adjudged liabilities against the appellants prima facie unsustainable as they did not align with the show cause notice's proposals. Consequently, the Tribunal waived the pre-deposit of the dues and stayed the recovery pending a decision in the appeals.

This judgment highlights the importance of adhering to the proposals in show cause notices, the eligibility criteria for specific benefits, and the need for sustainable liabilities in tax matters.