2018 (7) TMI 1945 - AT - Service Tax

Tribunal grants appellant service tax exemption under Notification No. 32/2004-ST. Declarations from GTAs deemed compliant.

The Tribunal ruled in favor of the appellant, holding that the appellant, as the recipient of GTA service, was liable to pay service tax but was entitled ... Reverse Charge mechanism - GTA Service - abatement of 75% in terms of N/N. 32/2004ST dated 03.12.2004 - HELD THAT:- The issue is decided in the case of M/S. INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, BOLPUR AND CCE & ST, PATNA [2015 (1) TMI 1258 - CESTAT KOLKATA] , where it was held that the certificates given by the GTA on their letter-heads has been held to be sufficient and the department cannot insist that such certificate should be on each consignment note. Appeal allowed - decided in favor of appellant. Issues:1. Liability of the appellant to pay service tax on GTA service.2. Applicability of Notification No. 32/2004-ST for abatement of service tax.3. Dispute regarding submission of consignment notes and bills for verification.4. Consideration of general declaration from GTA for abatement.5. Question of GTA registration under service tax and CENVAT Credit.6. Compliance with declaration requirements for exemption under Notification No. 32/2004-ST.Analysis:1. The appellant, as the recipient of GTA service, was held liable to pay service tax under Rule 2(1)(d)(v) of the Service Tax Rules, 1994. The dispute arose when a Show Cause Notice alleged that the appellant, as the service receiver, was not entitled to the benefit of exemption under Notification No. 32/2004-ST and had to pay the full rate of tax on the actual freight paid. The appellant contended that they had availed credit of duty on inputs and input services and should be entitled to the exemption. The adjudicating authority confirmed the demand for service tax, interest, and penalty under Section 76 of the Finance Act, 1994, leading to the appeal before the Tribunal.2. The appellant argued that the demand for the period in question was based on the inability to submit consignment notes and bills as required by a Board circular. They highlighted that the circular requiring declarations in consignment notes by transporters needed time for implementation, and general declarations from GTAs should suffice. The Tribunal referenced previous judgments to support the acceptance of GTA certificates as compliance with Notification No. 32/2004-ST, emphasizing that the format of such declarations was not prescribed, rendering the department's insistence on declarations on each consignment note unsustainable.3. The issue of GTA registration under service tax and CENVAT Credit was raised by the appellant to argue against the necessity of declarations in consignment notes. They emphasized that not all GTAs were registered under service tax, negating the need for declarations. The Tribunal cited precedents to support the appellant's position, stating that where GTAs were not registered, the question of availing CENVAT Credit did not arise, further reinforcing the acceptance of general declarations for abatement purposes.4. The Tribunal's decision favored the appellant, setting aside the impugned order and allowing the appeal with consequential relief. The judgment highlighted the lack of a prescribed format for declarations under the relevant notifications, leading to the acceptance of GTA certificates as sufficient compliance. The Tribunal emphasized that the department's insistence on declarations on each consignment note for abatement purposes was legally unsustainable, ultimately ruling in favor of the appellant based on the lack of merit in the impugned orders.