2022 (5) TMI 426 - AT - Service Tax

Tribunal Upholds Service Tax Demand on Mining Activities, Exemption Claim Rejected

M/s Lal Traders & Agencies Private Limited Versus Commissioner of Central Excise & Service Tax, Bhubaneswar I

The Tribunal upheld the Commissioner's order confirming the service tax demand on the Appellant engaged in mining activities, rejecting their claim for ... Levy of Service Tax - Goods Transport Agency Service - price per trip fixed with the transporter is less than Rs. 750/- per trip - eligibility for exemption from service tax under Notification No. 34/2004- ST dated 03.12.2004 - reverse charge mechanism - levy of penalty - invocation of extended period of limitation - HELD THAT:- On a plain reading of the notification, it is seen that what has been exempted is the gross amount charged on consignments transported in a goods carriage upto Rs. 1500/-. In the given case of the Appellant, the gross amount charged by the transporter per trip is Rs. 150/- which is clearly within the upper limit of exemption of Rs. 1500/. The said issue is no longer res integra in terms of the decision of the Tribunal in the case of CHHATTISGARH DISTILLERIES LTD. VERSUS COMMISSIONER OF C. EX., RAIPUR [2017 (11) TMI 344 - CESTAT NEW DELHI] where it was held that it appears that the exemption of Rs. 1500/- is available to “a” single transaction but when the transactions are consolidate with the same parties, the said exemption is not available on the subsequent vouchers. In the given case also though each trip cost has been determined as Rs.150/trip, however, the total invoice raised by the transporter is much higher for all the trips concerned. Thus, the order of the Ld. Commissioner (Appeals) is upheld and the appeal filed by the Appellant on merits, is rejected. Levy of penalty - HELD THAT:- Since the issue pertained to interpretation of the exemption notification, the powers under Section 80 of the Act is exercised to set aside the penalties as levied by the Commissioner (Appeals) under Section 78 of the Act. Extended period of limitation - HELD THAT:- The second Show Cause Notice was issued on 21/06/2013 invoking extended period of limitation - the said Show Cause Notice is barred by limitation. However as per the learned Departmental Representative, some portion of the demand is within the normal period of limitation and for the limited purposes to verify the same, the matter remanded to the Ld. Adjudicating authority. Appeal allowed by way of remand. Issues:Whether the appellant is entitled to exemption from service tax under Notification No. 34/2004-ST dated 03.12.2004.Analysis:The Appellant, engaged in mining activities, was alleged to be liable for service tax under reverse charge mechanism for services of Goods Transport Agency. A Show Cause Notice was issued proposing a service tax demand, which culminated in an Order-in-Original dropping the demand. However, the revenue appealed, leading to an Order-in-Appeal confirming the demand. The Appellant contended for exemption under Notification No. 34/2004-ST based on the price per trip being less than Rs. 750. The Tribunal analyzed the notification and previous decisions, emphasizing that the exemption applies to the gross amount charged on consignments transported in a goods carriage up to Rs. 1500. Despite the trip cost being Rs. 150, the total invoice by the transporter was higher, leading to upholding the Commissioner's order.The Tribunal referred to a previous decision regarding the exemption under the notification, highlighting that the exemption is available for a single transaction and not subsequent vouchers consolidated with the same parties. In this case, although each trip cost was Rs. 150, the total invoice amount exceeded the exemption limit. Consequently, the Tribunal upheld the Ld. Commissioner (Appeals) order and dismissed the appeal on merits. Regarding the penalty, the Tribunal exercised powers under Section 80 of the Act to set aside penalties imposed by the Commissioner (Appeals) under Section 78 of the Act due to the issue pertaining to the interpretation of the exemption notification.For the second Show Cause Notice issued invoking an extended period of limitation, the Tribunal considered the judgment of the Hon'ble Apex Court and held that there was no suppression of facts on the part of the assessee/appellant. As a portion of the demand fell within the normal period of limitation, the matter was remanded to the Ld. Adjudicating authority for verification. If any demand was found sustainable, it would be payable by the Appellant with interest, while the penalty was set aside.