GTA abatement under Notification No. 1/2006-S.T. upheld where non-availment of credit was established and later certificates were accepted.

Abatement under Notification No. 1/2006-S.T. was available for GTA services where the transporters were shown to be unregistered under the Service Tax regime, supporting the conclusion that they had not availed Cenvat credit or the benefit of Notification No. 12/2003-S.T. Certificates subsequently produced before the appellate authority were also ignored without justification. On that basis, the condition of non-availment was treated as satisfied, and the demand of service tax and the penalty were held unsustainable and set aside.

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Issues: Whether the assessee was entitled to the abatement under Notification No. 1/2006-S.T. in respect of GTA services despite the absence of contemporaneous certificates from the transporters, and whether the demand of tax and penalty could be sustained.

Analysis: The assessee established that the transporters were not registered with the Service Tax department, which supported the conclusion that they had not availed Cenvat credit or the benefit of Notification No. 12/2003-S.T. The assessee also produced certificates subsequently obtained from the transporters before the appellate authority, and those certificates were ignored without justification. On this basis, the condition relating to non-availment of credit and exemption stood satisfied, making the abatement under Notification No. 1/2006-S.T. available.

Conclusion: The assessee was entitled to the benefit of Notification No. 1/2006-S.T., and the confirmed demand of service tax and the penalty were unsustainable and were set aside.

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