Appellate Tribunal grants waiver of pre-deposit for ONGC Ltd. in service tax appeal tax

The Appellate Tribunal CESTAT, Bangalore allowed the appeal by M/s ONGC Ltd., Andhra Pradesh, for waiver of pre-deposit and stay of recovery of service tax and penalties under Sections 76 & 78 of the Finance Act, 1994. The Tribunal held that the appellants' provision of a consolidated declaration, instead of individual consignment notes with Goods Transport Agency declarations, complied with the notification requirements. The exemption benefit was granted for the period in question, and the stay petition was disposed of in favor of M/s ONGC Ltd.

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Issues: Application for waiver of pre-deposit and stay of recovery of service tax and penalties under Sections 76 & 78 of the Finance Act, 1994 based on exemption availed by the appellants under Notification Nos. 32/2004-ST and 1/2006 during a specific period.

Analysis:

The judgment by the Appellate Tribunal CESTAT, Bangalore involved a case where M/s ONGC Ltd., Andhra Pradesh, sought waiver of pre-deposit and stay of recovery of service tax and penalties amounting to Rs. 32,06,125/- under Sections 76 & 78 of the Finance Act, 1994. The issue revolved around the demand of exemption availed by the appellants under Notification Nos. 32/2004-ST and 1/2006 for the period from September 2005 to March 2006. The Commissioner had imposed penalties for failure to follow the prescribed procedure of obtaining a declaration signed by Goods Transport Agency (GTA) stating non-availment of Cenvat credit on each consignment note, as per CBEC Circular No. B1/6/2005-TRU dated 27.07.2005.

Upon review, the Tribunal found that the impugned order demanded the benefit of exemption under Notification No. 32/2004-ST due to the appellants' non-compliance with the declaration requirement. However, the Tribunal noted that for the earlier period, the exemption was not denied despite no amendment in the relevant notification conditions. Referring to a previous decision in the case of Andhra Pradesh Paper Mills Ltd. Vs. CCE, Viskhapatnam, the Tribunal observed that a consolidated declaration sufficed for compliance with the notification, as seen in Final Order No. 686/2009. In line with this precedent, the appellants in the present case had also provided a consolidated declaration instead of individual consignment notes with GTA declarations, leading the Tribunal to allow the appeal by M/s ONGC Ltd. The stay petition was consequently disposed of.

The judgment was pronounced and dictated in court by Member (Technical) P. Karthikeyan and Member (Judicial) M. V. Ravindran.

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