GTA service tax abatement: non-availment of CENVAT credit applies to the actual service provider, not the reverse-charge recipient.

A recipient deemed liable to pay service tax on Goods Transport Agency services under reverse charge was held entitled to abatement under the service tax notifications. The non-availment of CENVAT credit condition was construed as applying to the actual service provider, not to the recipient who discharged tax under section 68(2). On that basis, denial of abatement to the assessee was unsustainable, the impugned order was set aside, and consequential relief followed.

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Issues: Whether the assessee, being a recipient and deemed provider of Goods Transport Agency service who discharged service tax under section 68(2), was entitled to abatement under the service tax notifications and whether the restriction regarding non-availment of CENVAT credit applied to it.

Analysis: The abatement notifications conditioned eligibility on the service provider not having availed CENVAT credit on inputs, capital goods and input services. The assessee had discharged service tax as the recipient of GTA service under the statutory reverse-charge arrangement and was not the actual service provider rendering the transport service. The condition in the notifications was therefore to be applied with reference to the actual service provider, and the assessee could not be denied abatement on the ground recorded in the order under challenge.

Conclusion: The assessee was entitled to the abatement and the denial thereof was unsustainable.

Final Conclusion: The order denying the benefit was set aside and the appeal succeeded with consequential relief.

Ratio Decidendi: The eligibility condition for abatement under the service tax notifications, namely non-availment of CENVAT credit, attaches to the actual service provider and does not bar a recipient liable to pay service tax on GTA services under reverse charge from claiming the benefit.

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