Tribunal grants relief to cement manufacturers & recipients of GTA services, remands for fresh decision

The Tribunal set aside the denial of the benefit of Notification No.32/04-ST to the Appellants, manufacturers of cement and recipients of GTA Services, as they produced the necessary declaration post the adjudication order. The Tribunal waived the pre-deposit, interest, and penalty, remanding the matter for a fresh decision by the adjudicating Authority with a hearing opportunity for the Appellants. The Appeal was disposed of through remand, and the Stay Petition was resolved accordingly.

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Issues:
Application for waiver of pre-deposit of Service Tax, Benefit of Notification No.32/04-ST, Denial of benefit to recipient of service, Necessary declaration not filed, Verification of necessary declaration, Remand to adjudicating Authority.

Analysis:
The Appellants, who are manufacturers of cement and recipients of GTA Services, filed an Application for waiver of pre-deposit of Service Tax amounting to Rs.90,24,424 along with interest and penalties. The issue arose when a show cause notice was issued, denying the benefit of Notification No.32/04-ST to the Appellants on the grounds that the benefit was intended for the provider of service, not the recipient. The Commissioner of Central Excise, in the adjudication order, further denied the benefit citing the lack of necessary declaration regarding availing credit and the benefit of Notification No.12/2003 by the service provider.

The Appellants contended that the denial of the benefit was based on grounds not mentioned in the show cause notice. They subsequently produced the necessary declaration stating that the service provider had not availed the credit or the benefit of Notification No.12/2003 due to their non-registration with the Revenue Authorities as a provider of taxable service. The Departmental Representative reiterated the findings of the adjudication order, emphasizing the absence of declaration on the consignment notes regarding the service provider's credit and benefit availing status.

The Tribunal observed that the show cause notice was solely issued on the premise that the benefit of Notification No.32/04 was for the service provider, and the denial was based on the lack of necessary declaration. However, since the Appellants produced the required declaration post the adjudication order, which necessitated verification, the impugned order was set aside. The Tribunal waived the pre-deposit, interest, and penalty, remanding the matter to the adjudicating Authority for a fresh decision after providing a hearing opportunity to the Appellants. The Appeal was disposed of through remand, and the Stay Petition was also resolved accordingly.

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