GTA service abatement upheld where notification conditions were met and sample verification showed substantial compliance.

CESTAT Ahmedabad held that abatement under Notification No. 32/2004-ST and Notification No. 1/2006-ST for GTA services was available where the prescribed conditions were met, namely that the GTA had not availed CENVAT credit on inputs or capital goods and had not taken the specified exemption. The Tribunal accepted that the department had produced no evidence of breach, and that declarations appearing on lorry receipts or consignment notes, verified on a sample basis, showed substantial compliance. Full scrutiny of every lorry receipt was therefore unnecessary, and the Revenue's challenge failed.

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Issues: Whether the respondent was entitled to the benefit of the abatement under Notification No. 32/2004-ST and Notification No. 1/2006-ST for GTA services, notwithstanding the Revenue's objection that all LRs or consignment notes were not individually scrutinized.

Analysis: The entitlement to the abatement depended on fulfilment of the notification conditions, namely that the GTA had not availed CENVAT credit on inputs or capital goods and had not taken the benefit of the specified exemption notification. The appellate authority had found that the department had not produced evidence of any violation of those conditions and that the required declarations were available on the LRs or consignment notes, at least on sample verification. The Tribunal accepted that full-scale scrutiny of every LR was not necessary where the records and declarations disclosed substantial compliance and where the departmental case lacked evidence of non-fulfilment of the notification conditions. The Tribunal also relied on the settled view that a person discharging service tax liability on GTA service can avail the exemption if the prescribed conditions are met.

Conclusion: The respondent was entitled to the benefit of the notifications, and the Revenue's challenge failed.

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