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TMI Blog2014 (6) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... IA) and the judgement of the Hon’ble Allahabad High Court is in the case of Hello Mineral Water Pvt. Ltd. (2004 (7) TMI 98 - HIGH COURT OF JUDICATURE AT ALLAHABAD) - Decided in favour of assessee. - Appeal No.ST/97/2012-CU(DB) - Final Order No. 52466 - Dated:- 13-6-2014 - Mr. G. Raghuram and Mr. Rakesh Kumar, JJ. For the Appellant : Shri A.K. Batra, Chartered Accountant For the Respondent : Shri Amresh Jain, DR JUDGEMENT Per Rakesh Kumar: The facts leading to filing of this appeal are, in brief, as under:- 1.1 The appellant are a Goods Transport Agency (GTA) and they have Service Tax Registration for payment of service tax in respect of this service. The period of dispute in this case is from 1.4.2008 to 31.3.2009. During this period, they were availing of exemption under notification no.1/06-ST dated 1.3.2006 (S.No.6) which provides for 75% abatement on the gross amount charged subject to condition that cenvat credit of central excise duty paid on inputs or capital goods or of service tax paid on input service used for providing the taxable service of GTA has not been availed by the assessee or the assessee has not availed the exemption under notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, the same exemption was available under notification no.32/04-ST, which was being availed during that period, that the only conditions for availing exemption notification no.32/04-ST were that no credit of central excise duty paid on inputs or capital goods used in or in relation to providing output service has been availed by the assessee or the assesee has not availed the exemption under notification no.12/03-ST dated 20.06.2003, that w.e.f. 1.3.2006 notification no.32/04-ST was replaced by notification no.1/06-ST, the Sl.No.6 of the Table annexed to which provided the same exemption, that however, in the new exemption notification effective from 1.3.2006, an additional condition of non-availment of cenvat credit in respect of input services were also imposed, that the appellant not being aware of the additional condition having been imposed for availment of this exemption continued to avail cenvat credit in respect of the input services, that as soon as the departmental officers brought this discrepancy to their notice, they immediately reversed the credit of Rs.1,09,975/- along with interest, that just because during the period of dispute the appellant due to bonafide mistake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvat credit amounting to Rs.1,09, 975/- in respect of input services during the period of dispute was due to bonafide mistake and ignorance of the appellant is clear from the fact that no sensible assessee would forgo duty exemption of more than rupees one crore just to avail cenvat credit of Rs.1,09,975/-, that, in any case, in these circumstances of the case, penalty of equal amount under Section 78 of the Finance Act, 1994 was not justified as there was neither any wilful mis-statement nor suppression of facts or any deliberate defiance of law or dishonest conduct on the part of the appellant and that in view of the above, the impugned order passed by the Commissioner is not correct. 4. Shri Amresh Jain, ld. Departmental Representative, defended the impugned order by reiterating the findings of the Commissioner in the order and pleaded that 75% abatement in terms of sl.no.6 of the Table annexed to the exemption notification no.1/06-ST was subject to condition that neither any cenvat credit of excise duty paid on inputs or capital goods is availed nor any cenvat credit of service tax paid on any input service is availed nor the benefit of exemption under notification no.12/03- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d hence, the penalty under Section 78 has been correctly imposed. He, accordingly, pleaded that there is no infirmity in the impugned order. 5. We have considered the submissions from both the sides and perused the records. 6. The period of dispute in this case is from 1.4.2006 to 31.03.2007 and during this period, the appellant were availing the exemption under notification no.1/06-ST dated 1.3.2006 (Sl.No.6). In terms of this exemption, the taxable service of Goods Transport Agency service under Section 65 (105) (zzp) provided by the appellant is exempt from service tax leviable under Section 66 which is in excess of the service tax calculated on 25% of the gross amount charged for providing the service. This exemption, however, is subject to the following conditions:- (I) the cenvat credit of duty on inputs and capital goods or cenvat credit of service tax on inputs services, used for providing such taxable service, has not been taken under provisions of the Cenvat Credit Rules, 2004; or (II) the service provider has not availed the benefit under the notification of the Government of India in the Ministry of Finance (Department of Revenue), no.12/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when initially cenvat credit has been taken in respect of certain input services and subsequently, it is reversed along with interest, whether it would amount to non-availment of cenvat credit in respect of input services. On this point, the Apex Court in the case of Chandrapur Magnet Wires (P) Ltd. (supra) in the context of eligibility of the assessee for exemption under notification no.69/86-CE as amended by notification no.106/88-CE, which was available to copper winding wires subject to the conditions of not availing of input duty cenvat credit has held that when cenvat credit was initially taken, but subsequently reversed, it would amount to not availing the cenvat credit and in such a situation, the benefit of the exemption cannot be denied. Subsequently, Hon ble Allahabad High Court in the case of Hello Minerals Water (P) Ltd. (supra) held that when an exemption notification is subject to non-availment of modvat credit of inputs and initially modvat credit in respect of inputs had been taken, the benefit of exemption is to be granted when reversal of credit on inputs was done at the stage of filing of the appeal before the Tribunal and that even when the cenvat credit initi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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