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of <h1>Appellant entitled to service tax exemption despite early payment; Tribunal ruling sets new precedent</h1> <h3>M/s Jal R Patel Versus C.C.E. & S.T. - Vadodara-i</h3> M/s Jal R Patel Versus C.C.E. & S.T. - Vadodara-i - TMI Issues:Entitlement to value-based exemption under Notification No. 06/05-ST dated 01.03.2005.Analysis:The issue in the present case revolves around the entitlement of the appellant to a value-based exemption under Notification No. 06/05-ST dated 01.03.2005. The Department contended that since the appellant paid the service tax in April-07 before claiming the exemption, they were not entitled to it. The Department argued that the appellant should have opted for the exemption before paying the service tax in April 2007. Consequently, the Department confirmed the demand by denying the exemption under Notification 6/05-ST.On behalf of the appellant, it was argued that the cenvat credit availed was immediately reversed. Regarding the issue of eligibility for exemption after paying the service tax in April, it was contended that the appellant had opted for the exemption for the first time and did not withdraw from the exemption scheme. Therefore, the appellant should be eligible for exemption up to the aggregate value of Rs. 8 lakhs. Several judgments were cited in support of this argument.The Revenue reiterated its grounds of appeal, emphasizing that the appellant violated the Notification's condition by not availing the exemption from 1st April 2007 and by paying the service tax while also availing cenvat credit, making them ineligible for the exemption.After hearing both sides and examining the records, it was found that the appellant was denied the exemption primarily because they paid the service tax at the beginning of the financial year before opting for the exemption. However, it was established that once the appellant opted for the exemption, it could not be withdrawn, entitling them to the exemption up to Rs. 8 lakhs. Drawing parallels with a similar issue under Notification 01/2003-CE, a precedent set by the Tribunal in the case of Shri Cables and Conductors (P) Ltd. was cited, which was upheld by the Hon'ble Supreme Court. Following the precedent, it was concluded that the appellant was entitled to the Small Scale exemption under Notification 6/2005-ST. Consequently, the impugned order was set aside, and the appeal was allowed.
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