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of <h1>Tribunal rules in favor of appellant, exempts service tax on transportation.</h1> <h3>METAL SEAM CO. PVT. LTD. Versus COMMISSIONER OF C. EX., LUCKNOW</h3> The Tribunal allowed the stay petition, dispensing with the pre-deposit of service tax and penalty for the appellant. The judgment favored the appellant's ... Stay application - Availment of services of GTA for outward transportation - Benefit of Notification No. 35/2004-C.E., dated 3-12-2004 - Held that:- supplier of the inputs cannot be held to be an agent of the appellant, as construed by the lower authorities. The goods are admittedly supplied by the supplier on FOR destination basis and it is supplier who is liable to pay service tax which according to the appellant stands paid by them - Following decision of CCE, Vapi v. Neral Paper Mills P. Ltd. [2008 (12) TMI 121 - CESTAT AHMEDABAD] - Stay granted unconditionally. Issues:Prayer to dispense with pre-deposit of service tax and penalty under Finance Act, 1994.Analysis:The judgment deals with an application seeking exemption from the pre-deposit of service tax and penalty amounting to Rs. 12,57,530/- and Rs. 18,87,113/- imposed on the appellant. The appellants, engaged in manufacturing metal containers, availed services of Goods Transport Agency (GTA) for transportation of their final products and raw materials, paying service tax under relevant notifications. Show cause notice alleged short payment of service tax, confirmed by lower authorities and the Commissioner (Appeals). The appellants argued that for inward transportation, the supplier was responsible for paying service tax as per the contract terms on FOR destination basis. They contended that since they did not pay transportation charges, they were not liable for service tax. Regarding outward transportation, the appellants were denied the benefit due to the absence of a declaration from the transporter confirming non-availment of modvat credit.The Tribunal found merit in the appellant's case concerning the supplier's liability for service tax on inward transportation. The goods were supplied on FOR destination basis, making the supplier responsible for service tax payment, as claimed by the appellants. On the issue of outward transportation, the Tribunal referred to precedent decisions, including CCE, Vapi v. Neral Paper Mills P. Ltd., to support the appellants' contention. Considering the prima facie case in favor of the appellants and the Tribunal's previous decisions, the stay petition was allowed unconditionally, dispensing with the pre-deposit of service tax and penalty.The judgment, pronounced in open court by Ms. Archana Wadhwa and Shri Mathew John, JJ., highlights the Tribunal's careful consideration of the appellant's arguments, legal provisions, and precedent decisions to arrive at a favorable decision in allowing the stay petition and exempting the appellant from pre-deposit of service tax and penalty under the Finance Act, 1994.
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