Transportation of goods: transportation of effluent from the factory, cannot be considered as transportation of goods.

GTA service: Double taxation at intermediate stage: Matter remanded.

GTA service: Whether services of transportation taken from private truck operators would be covered in the amended definition: Partial stay granted.

GTA Service: Input tax credit can be used for discharging service tax liability, as it is a deemed taxable output service.

Service Tax: GTA Services: Demand: Notification No.32/2004-ST, dt.3.12.04: Appellant failed to produce the consignment notes containing the declaration of GTA(original service provider.). Subsequent production of consolidated declaration from GTAs will not serve the purpose of Notification in question. It is established that declarations filed by GTAs on their letter heads are sufficient to meet the requirement of notification.(Para 5). Revenue's appeal is, rejected .and the stay petition is disposed of.

Service Tax: GTA Services: Notification No. 32/04 ST dated 03.12.2004 : Appellate authority below has gone through the confirmation received from the transporters about the non-availment of cenvat credit for allowing the benefit of Notification No. 32/04 dated 3.12.04. Allowing appropriate relief, the Commissioner rightly worked out the liability that has arisen on the basis of evidence produced from the transporter. The said liability has been very neatly worked out for two different periods. There is no any legal infirmity with the order passed by the Id. Commissioner (Appeals). Therefore, dismissing both stay application and appeal, the prayer of the appellant is disposed as aforesaid.(Para 3).

Service Tax: Goods Transport Agencies (GTA) Notification No. 32/2004-ST and Notification No.1/2006-ST: Demand: Relevant evidences could not be produced before the Commissioner (Appeals), as they lost their file during the relevant period. The said evidences are available with them now and if the matter is remanded, the appellant would be in a position to satisfy the appellate authority in respect of the disputed issue.(Para 3).The impugned order is set aside and remand the matter to Commissioner (Appeals) for fresh adjudication.(Para 4).

GTA Service: Exemption not available to Government factory: Service Tax leviable. However, penalties set aside being company working directly under Ministry of Railways.

Service Tax: Goods Transport Agency Service: Cenvat Credit: Input Service  Remand: The Hon’ble High Court decision on the aforesaid question of law was followed by the bench and the benefit of CENVAT credit of the service tax paid on GTA service (input service) was allowed to the assessee for utilization in payment of service tax on the same kind of service availed as “output service” by way of a deeming legal fiction. Accordingly, the orders of both the lower authorities are set aside and direct the learned Commissioner (Appeals) to dispose of the assessee’s appeal on merits in view of the aforesaid case law. (para 4,5,6)

GTA Service: Exemption: Green Mushrooms eligible for exemption, but exemption not available to canned mushrooms as these are not understood in common parlance as green vegetables.

Service Tax: GTA Services: Cenvat: It could legally utilize cenvat credit to discharge Service Tax due under the category of GTA as a recipient of the said service. Therefore, the demand relating to the period up to 18.4.2006 is not sustainable. The same is set aside. In view of the changed legal position demand confirmed for the period from 19.4.2006 is sustained. Since the dispute was not isolated, the assessee could not be penalized in relation to the liability sustained. The appeal is allowed by way of remand to the Original Authority to re-determine the assessee's liability.

Service Tax: Refund under Notification No. 41/2007: GTA Services: The service tax paid in respect of GTA services for inward transportation of containers and detention charges, prima-facie admissible. As regards detention charges, as rightly submitted that denial of refund would amount to reassessment at the receiver's end. As regards inward transportation of containers, the words used in table - "in relation to", would support the case of the appellants. Therefore, the appellant has been able to make out a strong prima facie case in their favour. Accordingly, the requirement of pre-deposit of all the dues is waived and stay against recovery of the same is granted during the pendency of appeal.(Para 3).

Service Tax: Goods Transport Agency Service: Limitation: The Hon’ble High Court, vide its interim order, had not restrained the Revenue authorities from issuing any show-cause notice. In the absence of any such restrainment, the show-cause notice dated 19.10.2005 issued to the appellant is blatantly time barred. It has to be held that the show-cause notice dated 19.10.2005 issued to the appellant is barred by limitation. Hence, the impugned orders are liable to be set aside (para 13,14,17)

Service Tax: Goods Transport Agency Services: Abatement: Pre-deposit: The fair submissions of the learned Advocate for the applicant and their cooperation with the department to seek registration as well as to discharge a part of the demand during pendency of the appeal is appreciated. Taking into consideration the gravity facts and circumstances of the case, the applicant is directed to make further deposit of Rs. 20 lakhs within 8 weeks from today and report compliance on 2nd June, 2011.(para 4)

Service Tax: GTA Services: Demand: Waiver of pre-deposit: Remand: The appellants had failed to substantiate its entitlement to the disputed exemption before the Revisionary authority with required documents. The exemption is conditional upon the GTA not availing the benefit of Cenvat credit and of Notification No. 12/2003-ST. There was a fire accident in the assessee's factory and it had lost the documents necessary to defend. The appellants had sought ten weeks' time to obtain/relocate the documents by contacting the GTA operators. Therefore, the impugned order was passed in violation of the principles of natural justice. The impugned order is set aside and remand the matter to the Commissioner to take a fresh decision in the matter after allowing reasonable time to the appellants to furnish evidence in their defence. The stay application and the appeal are disposed.(Para 3) 

Service Tax: Goods Transport Agency: Demand: Eligibility for exemption under Notification No. 34/2004-ST dated 3.12.2004 is with reference to the person providing service and not with reference to person paying tax. So there appears to be no reason to deny this exemption. We find from the existing facts that the appellants have made out a strong prima facie case in their favour by both the arguments. Therefore, we order grant of stay against the recovery of entire demand during the pendency of the appeal.(Para 4).

Service Tax: Goods Transport Agency Service: Cenvat Credit utilized for payment of Service Tax: Pre-deposit: In view of the fact that there are contrary decisions and also the latest decision of the Tribunal after the issue was referred by this Tribunal to the Larger Bench is in favour of the appellants, the requirement of pre-deposit of the demands has to be waived and stay allowed during the pendency of appeal.

Service Tax: GTA services: Notf. No. 32/2004 and 01/2006: Grounds for appeal: There cannot be a ground for the Tribunal to interfere with an order passed by adjudicating Commissioner unless the Committee of Chief Commissioners does its own home work and verification, and points out the basis on which it finds the order under review to be not legal and proper. As such, the ground of appeal taken in this case is vague and it does not provide any basis for holding any part of the relief granted by the Commissioner to be legal or proper.(Para 5). When the legal provisions remained the same through out the period, any clarification given by the Board would be applicable for the entire period so long as there has been no change in the legal provision.(Para 6). Appeals filed by the department are dismissed. (Para 7).

Service Tax: GTA service: Demand: There was excess payment during the period April, 05 to March, 06 and also the said amount has been utilized for part payment of service tax during the April to July, 06, the question of service tax once again does not arise. (Para 5). There shall be waiver of pre-deposit of dues as per the impugned order and recovery thereof stayed till disposal of the appeal. (Para 6).

Service Tax: GTA services: Demand: In terms of Notification No. 36/2004 dated 31.12.2004, the appellants have to pay service tax inasmuch as they have paid the freight and that they satisfy other conditions making the present appellant liable to pay service tax. The assessee has produced evidence in respect of some transport companies indicating payment of service tax by them. This evidence do not indicate that payment includes service tax relating to transportation involving the present appellants. The decision of the Commissioner (Appeals) demanding service tax from them has to be upheld. The liability of interest also has to be upheld. Further considering that it was during the initial stages of introduction of levy of GTA service and in view of some evidence being shown that the GTA service providers who provided services to the appellant, has paid service tax, hence it is an appropriate case to invoke the provisions of Section 80 to set aside the penalties imposed upon the appellants.(Para 6). 

Service Tax: GTO services: Demand: It is established that even the amended Section 73 takes in only the case of assessees who are liable to file return under Section 70. Admittedly, the liability to file return is cast on the appellants only under Section 71A. The class of persons who come under Section 71A is not brought under the net of Section 73. The above being the position show cause notices issued to the appellants invoking Section 73 are not maintainable(Para 4). Accordingly, the assessees’ appeals are allowed and the Revenue’s appeals are dismissed. “Cross objection” also stand disposed of for the record.(Para 9). 

Service Tax: Goods Transfer Agency: Scope: Demand: The services availed by the applicants are not covered under the goods transport agency. In this case, the consignors and the consignees are not different but the consignor and consignee is the sugar factory because the goods are first collected at the collection centre by the sugar factory and then transported to their factory. Hence they have made out a prima facie case in their favour. Accordingly, waiver of entire service tax alongwith interest and penalty is granted and demand stayed during pendency of the appeal.(Para 6)

Service Tax: Erection, Commissioning and Installation of Transmission lines: CENVAT: The applicant is provider of erection, commissioning and installation services in respect of transmission lines and the goods are transported to different sites and Service Tax has been paid on GTA service by the applicant. In these circumstances, prima facie, the Service Tax paid on GTA service which is an input service, the applicants are entitled for this credit as provider of taxable service. Further, we find that the Board's Circular, which provides that the services provided by the applicant are not taxable and it further clarified that pending disputes are to be settled as per the Board's clarification. In these circumstances, the amount already deposited is sufficient for hearing and disposing of the appeal. The pre-deposit of the remaining amounts of the Service Tax, interest and penalty is waived and recovery of the same is stayed during the pendency of the appeal. Stay petition is allowed.(Para 4). 

Service Tax: Goods Transport Agency Service: Cenvat Credit: As regards the period prior to the amendment to CENVAT Credit Rules made on 19.4.2006, i.e. for the period up to 18.4.2006, the assessee-appellants/assessee-respondents are entitled to utilize CENVAT credit for paying service tax on GTA service. Hence for the period inclusive and upto 18.4.2006 the tax demand along with demand of interest and penalties, wherever imposed are set aside in respect of these 50 appeals. (para 7)

Service Tax: Goods Transport Agency Service: Cenvat Credit: As far as the period beyond 18.4.2006 is concerned, the Tribunal in the case of Alsthom Ltd. Vs. CCE - 2008 (12) S.T.R. 23 has also dealt with the issue for this period and has held in that case that the credit cannot be utilized for paying service tax for this period as well. As such, as far as the period beyond 18.4.2006 is concerned, the appellant/respondent-assessees are not entitled to utilize CENVAT credit for payment of service tax on GTA service and therefore, the duty demand and demand of interest are justified. (para 8)

Service Tax: Goods Transport Agency Service: Cenvat Credit: Penalty: However, considering the disputed nature of the issue, the imposition of penalty in respect of the period from 19.4.2006 to 28.2.2009 is not justified and wherever penalties have been imposed, the same are set aside. (para 8)

Service Tax: Goods Transport Agency Service: Penalty: In these circumstances and in view of multiplicity of persons out of whom one of them was required to pay service tax, the claim of the appellant that they were in the bona fide belief that they were not required to pay service tax and there was no deliberate intention on their part to evade the service tax, deserves to be accepted. The appellants who are dealers of scrap have to be extended the benefit of provisions of Section 80 of the Finance Act, 1994. (para 6)

Service Tax: Goods Transport Agency Service: It is fact that realization of the service tax has been made from the service provider while the recipient of service of GTA has liability under the law. Finding no loss of revenue, as has been held by the learned Commissioner (Appeals), Revenue's appeal is dismissed. (para 4)

Service Tax: Goods Transport Agency Service: Abatement under Notification No. 32/04-ST dated 3.12.2004. Declaration of non-availment of Cenvat credit: The Notification does not require consignment - wise declaration on consignment notes. As the issue is covered in favour of the respondents by above referred decisions of the Tribunal, no infirmity in the view adopted by the Commissioner (Appeals), Accordingly, appeal field by the Revenue is rejected. (para 5)

Service Tax: Goods Transport Agency Service: Refund: Declaration regarding non-availment of Cenvat Credit : Abatement : The refund is rejected on the ground that such declarations were not on each of the invoice and were filed after the services were availed. No merits in the above reasoning of the original adjudicating authority. The Commissioner (Appeals) has correctly observed that by filing declaration,' the basis of Notification No. 32/2004-ST dated 3.12.04 stands fully satisfied, in which case abatement to the extent of 75% of the gross amount charged was available to the assessee. (para 7)

Service Tax: Goods Transport Agency Service: Refund: Unjust enrichment: The findings of the appellate authority that the said tax was paid subsequent to the clearance of the goods and the party wise ledger on record clearly show that the appellants have only claimed freight from their customers and Service Tax paid has not been charged, do not stand rebutted by the Revenue. No merit in the Revenue’s appeal and reject the same (para 8,9)

Service Tax: Goods Transport Agency Service: Transportation of coal and iron ore: Cenvat Credit: Input Services: It has been held in the decisions relied upon by the Id. Authorized Representative for the appellants that in the case of removal of inputs as such, there is no specific provision for reversing the credit involved on. inputs services utilized for bringing the said inputs. In view of the above, the orders of the lower authorities are set aside and the appeal is allowed with consequential relief as per law. (para 5,7).

Service Tax: Goods Transport Agency Service: Notification Nos. 32/2004-ST dated 03.12.2004Declaration regarding non-availment of Cenvat Credit : The benefit is denied for the reason that declaration of GTA as regards not availing the Cenvat credit was not available on each consignment note. There is no such condition in the notification. Notification benefit should be allowed also for the period after issue of Circular based on the consolidated declaration obtained from GTA. Set aside the order and allow this appeal. (para 4)

Show Cause Notice: Service tax paid with interest prior to the issuance of show cause notice on their own: provisions of 73(3) applicable : appeal allowed.

Service Tax: Goods Transport Agency Service: Abatement: Remand: The subsequent circular dated 21.08.2008 indicates that even a general declaration from the GTA would suffice the condition of the notification. Allow the stay petition unconditionally and set-aside the impugned order and remand the matter to Commissioner (Appeals) for decision on merits without insisting on any pre-deposit.

Service Tax: Goods Transport Agency Services: Abatement: Declaration regarding non-availment of Cenvat credit by Service provider: There is no allegation to the effect that GTAs have availed credit on inputs and capital goods or that they have availed the benefit of Notification No. 12/2009-ST Date: 20.06.03 and therefore the benefit of abatement under Notification No. 32/2004 cannot be denied to the assessees. No reason to interfere with the impugned orders and uphold the same and dismiss the appeals. (para 2)

Service Tax: Goods Transport Agency: Double Taxation: Service Tax was paid by the goods transport agency and therefore the question of payment once again on same services did not arise. Following the ratio of Navyug Alloys Pvt. Ltd. departmental appeal is rejected.

Goods Transport Agency: There is nothing coming out from the adjudication order to demonstrate that goods for and on behalf of the appellants were transported by Goods Transport Agency.

Pre deposit Waived: Stay granted: In absence of any description on the identity of the service provider brought to record for examination, the case does not warrant at the interim stage to call for pre-deposit. Pre deposit Waived . Stay granted.

Input service: GTA outward transportation: Bombay High Court judgment in the case of Coca-Cola India applicable: Stay granted.

Service Tax: Goods Transport Agency Service: Transportation of inputs into its factory and outward transportation of its finished goods: Refund: Stay application: The impugned order has been passed following the decision of the Tribunal which has not been stayed by any higher judicial forum. No interference with the impugned order called for at this stage. The stay application is rejected as devoid of merits. (para 3)

Service Tax: Cenvat Credit: Goods Transport Agency Services: The limited issue to be decided is whether port of shipment can be considered as place of removal. It was also submitted before the Commissioner (Appeals) that in all the cases, exports were made on FOB/CIF basis. This has not been contradicted. Under these circumstances as submitted by the learned advocate the issue stands squarely covered in favour of the appellants. (para 2)

Service Tax : Appeal: Stayed decision not a legal precedent: Further, he has also submitted that the decision in the case of ABB Ltd. STO 2009 CESTAT 878 which has been stayed would not affect the legal position taken by the Tribunal in the above decisions. Agree with the submissions made by the learned advocate and accordingly allow the appeal with consequential relief to the appellants. (para 3)

Service Tax: Goods Transport Agency Service: Rectification of Mistake: Service received from Truck Operators or Transporters: The application filed by the assessee aims to open up new ground of appeal and by this, he wants to argue the entire matter which is not the mandate under the provisions of Section 35C of the Central Excise Act, 1944. No merit in the application filed by the assessee/applicant and the same is dismissed. (para 7,8)

Service Tax: Delayed payment of tax: Penalty: Section 78: Section 78 applies where there is fraud, collusion mis-statement or suppression etc., and the heading for the said section reads as “penalty for suppressing value of taxable services”. Delayed payment of service tax, therefore, does not come under the ambit of Section 78. Hence the penalty upheld under Section 78 by the lower appellate authority requires to be set aside.

Service Tax: Goods Transport Agency Service: Pre-deposit: Since it is on record that the appellant is a truck owner and also hires truck from others for providing the same to his clients on hire, the activity, prima-facie, may not fall under the category of GTA, as held by this Bench in the case of Lakshminarayana Mining Co. (Supra). In view of this, application for waiver of pre-deposit of amounts involved is allowed and recovery thereof stayed till the disposal of the appeal. (para 6)

Service Tax: Goods Transport Agency Services: Notification Nos. 32/2004-ST dated 3.12.2004 : Consolidated declaration of non-availment of Cenvat Credit : In the instant case also the appellants have furnished a consolidated declaration by GTA in respect of each consignment for which the appellants had paid freight and service tax. Following the decision in the case of Andhra Pradesh Paper Mills Ltd. (supra), the Present appeal filed by M/s. ONGC Ltd is allowed. (para 3)

Service Tax: Refund: Unjust Enrichment: CA Certificate: The appellant is required to show that duty has not been passed on from sales record, balance sheets and other related documents, mere certificate is not sufficient. The appellants are directed to provide a proper Chartered Accountant certificate which would specifically say how the Chartered Accountant has come to the conclusion that duty liability has not been passed on and on what basis. The appeal is remanded back.

Service Tax: Goods Transport Agency Service: Freight Charges: Abatement: Pre-deposit: Abatement of 75% of the freight charges is to be allowed to the assessee if a declaration is filed. Notification No. 32/2004-S.T does not envisage any specific conditions which needs to be followed for availing the abatment of 75%. The applicant has made out a prima facie case for waiver of pre-deposit of the amount involved. Application for waiver of pre-deposit of the amount involved is allowed and recovery thereof stayed till the disposal of the appeal. (para 4)

Service Tax: Goods Transport Agency Services: Services received from truck owners and goods transport operators : Pre-deposit : This Bench has held that the demand of service tax on the services received -from the truck owners or goods transport operators as GTA service is inappropriate and cannot be sustained. The appellants have made out a prima facie case for waiver of pre-deposit of the amounts involved. (para 6)

Service Tax: Goods Transport Agency Service: The assessee itself claims to be a GTA. In the circumstances, not appropriate to interfere with the demand and the penalty imposed on the appellant by the original authority. (para 6.1)

Service Tax: Goods Transport Agency Service: Penalty: Section 76: The original authority had exercised its jurisdiction and found it appropriate not to impose penalty under Section 76 of the Act. Both the authorities have not rendered a sound finding substantiated with any evidence to the effect that the appellants had not paid the tax on account of fraud, suppression of facts, willful misstatement etc. with intention to evade the tax due. In the circumstances the appeal is party allowed by vacating the penalty imposed on the appellants under Section 76 of the Act. (para 6.1.)

Service Tax: Goods Transport Agency Services: Remand: The details of owners of vehicles on which the goods were loaded were not available before the authorities below. The interest of justice therefore requires that the case be remanded to the adjudicating authority for verification of the assessee’s submission. If the assessees were correct in their contention that the transporters were only individuals, then the Tribunal’s decision in Kanka Durga cited supra would apply and the demand cannot be sustained. (para 3)

Service Tax : Section 66A: Import of Services : Services received from abroad: Liability to pay tax only from 18.04.2006: The demand of the service tax prior to 18/4/2006 could not be raised on them as the ratio of the judgment of the Hon'ble High Court Judicature at Mumbai in the case of Indian National Shipowners Association (supra) is in their favour. In view of the law settled, the impugned order is not sustainable and hence, set aside and the appeal is allowed with consequential relief, if any. (para 8,9)

Service Tax: Goods Transport Operator’s Services: Refund: The demand services tax on the assesses who are recipients of Goods Transport Operator’s services is required to be upheld in the light of the apex Courts decision in the case of Gujarat Ambuja Cements Ltd. Vs. UOI. The impugned order rejecting the refund claim of Rs. 15,88,185/ - is upheld.

Service Tax: Goods Transport Service: Cenvat Credit: Appeal: The appeal has been filed in form meant for service tax appeal and in respect of a manufacturer who had availed cenvat credit and it should have been filed under Central Excise Act and during the relevant time there was no Commissionerate at Valsad at all, the appeal becomes not maintainable under the law and accordingly the same is rejected. (para 3)

Service Tax: Appeal: Condonation of Delay: The Application for condonation of delay is filed on the ground that only one appeal was filed under the belief that one set of appeal is required as there is only one order in appeal under which appeals in respect of two orders in original were decided by a common order. The delay is condonable as the Revenue has been able to explain the reason of delay, there was no malafide intention. (Para 2,3)

Service Tax: Goods Transport Agency Service: Cenvat Credit used for payment of service tax: The Commissioner (Appeals) has allowed the appeal following the decision of Nahar Industrial Enterprises (supra) and the department has failed to submit any decision contrary to that. The department has not made out prima facie case in their favour. Accordingly, the stay application is rejected. (para 5)

Service Tax: Goods Transport Agency Service: Suppression: Penalty: The department has not established that there was any suppression on their part so as to invoke the extended period of limitation against them for confirmation of the demand. Accept the contention of the assessees that they are not liable to penalty and accordingly set aside the penalty and allow the appeal.

Goods Transport Agency: Issue of Show Cause Notice: Demand raised in Show cause notice, invoking section 73 for failure to file return under section 71A for GTA service as it stood on the date of issuance of show cause notice and also under the provisions as amended by Finance Act, 2003, not sustainable as section 73 applied only to those assesses who were liable to file return under section 70. In the instant case the facts are identical to the case law cited by the appellant viz. L.H. Sugar Factories Ltd. Accordingly, the impugned order is set aside and the appeal is allowed.

Service Tax: Goods Transport Agency Service: Abatement: Pre-deposit: The issue involved, in this case is disallowance of 75% of the amount of freight charges paid as by filing a general declaration. Various decisions of Tribunal are holding a view that abatement of 75% needs to be given, once a general declaration is filed. The appellant has made out a prima facie case for waiver of pre-deposit of the amount confirmed by the Commissioner as a revisionary authority. Application for waiver of pre-deposit of the amount involved is allowed and recovery thereof stayed till disposal of the appeal. (para 6,7)

Goods Transport Operator Service: Issue covered by decision in Gujarat Carbon & Industries Limited: Hence departmental appeal dismissed.

Service Tax: Goods Transport Agency Services: Taxable Value  Notification No. 29/2008-ST dt. 26/6/2008 : Freight charges paid to the transporters for internal movement of the mining products and for development of mine by uplifting the waste material: The impugned transactions, where the appellant availed service of transportation by goods carriages not operated by GTA are not liable to tax under the head Goods Transport Agency service. The impugned orders set aside and allow the appeals with consequential relief, if any. (para 6,7)

Service Tax: Goods Transport Agency Service: Tax paid using Cenvat Credit: The definition of provider of taxable for service contemplates "provider of taxable service include a person liable for paying service tax". If this is the definition of provider of taxable service, the definition of Rule 2(p) would include the respondent as a provider of taxable service as recipient of the services of GTA. In the case of Mahindra Ugine Steel Co. Ltd. (supra) the Bench was at that time considering definition of output service as provided under Rule 2(p) of Cenvat Credit Rules, 2004 before amendment. The ratio of the said decision will cover the issue as definition of "provider of taxable service" has not undergone any change during the period in question in this case. Appeal filed by the Revenue is rejected. (para 7)

GTA Service: Outward movement of goods: Cenvat credit of service tax utilized for payment of service tax on GTA service: Issue debatable as matter referred to Larger Bench: Stay granted.

Service Tax: Goods Transport Agency Service: Pre-deposit: In the instant case, the appellant produced consolidated declarations in respect of each GTA. The Commissioner denied the benefit of the notification to the appellant for the material period on the ground, that the CBEC Circular dt. 27/7/2007 prescribed the procedure of production of evidence of GTA not availing benefit of Notification No.32/2004-S.T. dt. 3/12/2004 by appropriate endorsement on each consignment note. This is not a condition prescribed in the notification. As per Sunhill Ceramics Pvt. Ltd. (supra) relied upon by the Id. Counsel for the appellants, recipient of GTA service is not required to produce evidence to the effect that GTA had not availed cenvat credit in order to qualify for the benefit of the Notification No. 32/2004. There shall be waiver of pre-deposit of adjudged dues pending decision in the appeal. (para 5)

Service Tax: Goods Transport Agency Service: Abatement: In the instant case, the appellant produced consolidated declarations in respect of each GTA, it had engaged during the material period to the effect that the GTA concerned had not availed cenvat credit or benefit of Notification No.12/2003-S.T. As per the decision of the Tribunal in the case of Sunhill Ceramics Pvt. Ltd. (supra) relied by the Id. Counsel for the appellants, recipient of GTA service is not required to produce evidence to the effect that GTA had not availed cenvat credit in order to qualify for the benefit of the Notification No.32/2004. The appellants have made a prima-facie case against the demand of service tax and penalties. (para 5)

GTA Service: Stay: Limitation: Appellants disputing levy on the ground that they were arranging for transportation on behalf of farmers, hence, not liable to pay service tax: On Limitation prima facie case made out: Stay granted.

Service Tax: Goods Transport Agency Service: Adjustment of excess credit against short payment provision of Rule 6(3): There is no dispute that the respondent had paid excess service tax during the period, which they sought to adjust subsequently. The learned Commissioner (Appeals) order is proper and correct and does not suffer from any infirmity. Appeal filed by the revenue is rejected.(para 7)

Service Tax: Goods Transport Agency Service: Recipient of Service: Refund: The definition of taxable services clearly includes that any services provided to a customer of goods transport agency in relation to transport of goods in a goods transport will be taxable in the hands of the recipient of the said services and the said services are taxable in his hands. (para 7)

Service Tax: Goods Transport Agency Service: Recipient of Service: Abatement: The appellant is eligible to get abatement of 75% of the value of the services as regards the goods transport agency for discharge of service tax liability. Matter remanded back to the adjudicating authority for the limited purpose of quantification of the service tax liability after allowing 75% abatement. (para 8)

Service Tax: Goods Transport Agency Service: Penalty: Tax and interest paid - Considering the entire facts and circumstances of the case, and the fact that the lower appellate authority has found it to be a fit case to be covered under Section 80 of the Finance Act, 1994, the penalties imposed on the appellants under Section 76, 77 & 78 of the said Act is waived. The appeal is allowed.

Service Tax: Goods Transport Agency Service: Service Tax Liability discharged utilizing Cenvat Credit: Pre-deposit: In view of the divergent views held by the Tribunal, waiver of pre-deposit of the interest confirmed against the appellant and stay recovery thereof till the disposal of the appeal. The stay application is allowed. (para 3)

Service Tax: Goods Transport Agency Services: Services of the individual truck owners availed for transporting goods: Refund: Unjust Enrichment : Refund claims had been allowed by the Commissioner (Appeals) and these orders attained finality in the absence of challenge by the Revenue. Only the administrative work of releasing the refund amount was pending. The impugned orders were passed in accordance with law and the appeals filed by the Revenue are devoid of merit. In the circumstances, the appeals filed by the Revenue. (para 7)

Service Tax: Goods Transport Agency Service: Individual Truck owners: Details of the owners of vehicles on which the goods were transported, was not before the authorities below and therefore the interests of justice require that the case be remanded to the adjudicating authority for verification of the above submission of the assessees. The transporters being individual truck/tractor owners, the decision of the Tribunal cited supra would be applicable and no service tax demand can be sustained against the assessees. The appeals are thus allowed by way of remand. (para 3,4)

Service Tax: Goods Transport Agency Service: Penalty and Interest: The liability to service tax on the activity of transportation of petroleum products by truck owners for HPCL was pending for clarification before the CBEC till 30.1.2006.  After obtaining the clarification, the appellant got registration with the department and paid the service tax due immediately. As the liability to service tax demanded is not contested, liability to interest confirmed as per law is sustainable. No penalty is liable to be imposed on HPCL as they had rightly believed that the activity impugned was not exigible to service tax. The penalties imposed and set aside.The appeal is thus partly allowed. ( para 6,7)

Review & Revision: When impugned order already challenged before Commissioner (A), Commissioner could not have reviewed the same.

Service Tax - Goods Transport Agency Service - Pre-deposit: Prima-facie, the appellants have only reimbursed the freight expenses incurred by the suppliers and since the appellants' contracts that the suppliers were on F.O.R basis, it is the suppliers who had engaged the transporters to arrange the transportation of the goods from Nepal upto the appellant's factory premises and it is the supplier who have made payment to the transporters. Therefore, prima-facie, the appellants cannot be treated as recipient of GTA service. Pre-deposit of demand, interest and penalty is waived for hearing of these appeals and recovery thereof is stayed. The stay petitions are allowed. (para 3)

Service Tax: Goods Transport Agency Service: It has been consistently contested by the assessees that services were not being provided to them by the Goods Transport Agency but by individual truck owners/lorry owners.  It has been held by the Tribunal in the case of Lakshminarayana Mining Co. Vs. CST, Bangalore = STO 2009 CESTAT 1405 and in the case of CCE, Guntur Vs. Kanaka Durga Agro Oil Products Pvt. Ltd. =  STO 2009 CESTAT 1120 that transport undertaken by individuals owning and operating lorry and trucks is not subject to service tax as in these cases services has not been provided by Goods Transport Agency Service. The impugned orders are set aside (para 3)

Service Tax - Goods Transport Agency Service - Service Tax liability discharged before issue of SCN - Penalty - The original authority did not record any finding as to whether the appellant had evaded the service tax due by fraud, collusion, willful mis-statement or suppression of facts. There is no finding if the assessee was aware of its liability to pay the service tax under GTA and had knowingly refrained from paying the tax due. In the absence of a finding of intention to evade payment of duty, the assessee was entitled to the relief prescribed in the Circular by the CBEC. Vide the impugned order, the Commissioner (Appeals) has imposed penalties on the appellant finding intention to evade payment of service tax without any additional evidence. His finding that Shri M. Ravikumar's statement indicated that the appellant was aware of service tax levy, is without basis. The penalties are therefore liable to be set aside. Moreover, as per Section 73 (3) of the Act, when the assessee discharged liability to service tax along with applicable interest before issue of show cause notice, no proceedings should be initiated against the assessee. (para 5,5.1)

Service Tax: Goods Transport Agency Service: Cenvat Credit on outward transportation - The appellant satisfied all the conditions stipulated in the Board's circular and, therefore, they are entitled to CENVAT credit of the service tax paid on GTA service availed by them for outward transportation of their goods to their buyer's premises. The decision to the contra is to be set aside. Accordingly, the impugned order is set aside and this appeal is allowed.

Service Tax: GTA services: Exemption: In the impugned order, no finding are recorded to the effect that the truck operator involved was a goods transport agency and was not operating its own trucks. It is established that services provided by individual truck owners are not liable to service tax under the category of GTA.(Para 5). Exemption under Notification No 34/04-ST dated 03.12.2004 was available to the appellant since the freight incurred for each consignment for transporting materials from the port to its premises was always less than Rs 1500/-(Para 6). The appellants have made out a case for waiver of the adjudged dues. Accordingly, complete waiver of pre-deposit is ordered and stay recovery thereof.(Para 7)  

Service Tax: GTA Services: Waiver of pre-deposit: As show cause notice was issued only on the ground that no benefit of Notification No.32/04 is available to the service provider and in the adjudication order it is held that no necessary declaration is filed. Hence the benefit is not available. Now the Applicants produce the necessary declarations to the effect which requires verification therefore the impugned order is set aside after waiving the pre-deposit, interest and penalty and matter is remanded to the adjudicating Authority to decide afresh. Appeal is disposed of by way of remand. Stay Petition is also disposed of.(Para 6). 

Cevnat Credit on GTA: The appellants are entitled to the credit on Service Tax paid on GTA services received. By getting the declaration subsequently, substantial requirement of the notification is fulfilled.

Double Taxation: CBEC vide F No.341/18/2004 TRU(PT) dated 17.12.2004 has clarified that if service tax due on transportation of a consignment has been paid service tax should not be charged for the same amount from any other person to avoid double taxation.

Stay: Cargo Handling Service: Appellants only engaged in transportation of goods which is not covered under CHS : Waiver from pre deposit granted.

Retrospective effect: Amending Notification No. 19/2005-ST dated 07.06.2005 cannot have retrospective effect. The Vocational Training Institute itself would cover even the Computer Training.

Cenvat credit in GTA: TR-6 challan is made a valid duty paying documents for the purpose of Cenvat credit Notification No. 28/2005-CE dated 7.6.2005 with effect from 16.6.2005. Tribunal affirmed that  credit was wrongly denied on the ground that prior to 16.6.2005 as the TR-6 challan was not valid duty paying documents for the purpose of taking credit.

GTA Service on Outwards Transportation: Non Speaking Order passed by Commissioner (A) set aside for denovo consideration. In cases where the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods to the purchaser at his door step the assessee could take credit of the service tax paid on the freight for transportation to such place of delivery.

Dual role: The appellant adorns dual roles both as service provider and recipient of services. Department treats the appellant as service provider only to the extent of paying the service tax, the appellants are placed at a disadvantageous position. Tribunal having granted stay in similar matters, granted complete waiver.

Refund in case of Retrospective Amendment: The refund of service tax, which was subsequently paid by the assessee, due to the retrospective amendment, as regards the Service tax liability as recipient of services GTA, the issue being squarely covered in favour of the respondent Issue covered by decision of Tribunal in the case of B.G. Chitale Appeal filed by the revenue is rejected.

Refund : ‘inter parte’ order cannot be nullified by issuing show cause notice and withholding refund of the amount which the respondents had deposited pursuant to the interim order of the Commissioner which became due to them as refund after the Tribunal set aside the Order of Commissioner (A). The Department challenged the order of this Tribunal dated 21-2-05 and the matter is pending in the Supreme Court, till such time the matter is finally decided by the Supreme Court, in the absence of any interim order to the contrary, the Department has no option but to implement order of this Tribunal dated 21-2-05. Appeal filed by the appellants dismissed.

Refund: Payment under protest: In terms of Notification No. 43/97-S.T, Dated 05-11-1997 as amended, the appellants were not required to pay service tax for the GTO service availed during 16-11-1997 to 1-6-1998. They had made this claim as early as 15-7-2002 in response to the Show Cause Notice dated 28-6-2002. Therefore, it has to be held that the appellants had paid the impugned tax under protest. In such a case, limitation of one year did not apply to the refund due.

Deposit: An amount paid during the pendency of adjudication of a proposal to demand an amount had to be treated as a deposit. The amount was not to be treated as tax as the same was collected without the authority of law.

Input Service Credit : Cenvat credit of service tax paid on Goods Transport Agency (GTA) service availed prior to 16-6-05. Notification No. 28/05-C.E. (N.T.) dated 7-6-05 prescribed TR6 challans as the document evidencing payment of service tax to avail credit of tax paid on GTA service. This notification had come into force on 16-6-05. Therefore, the credit availed by the assessee on the TR6 challans issued prior to 16-6-05 was found not admissible by the lower authorities as these were specified as valid documents from 16.6.2005.  Since the service tax was paid from 1.1.2005 the cenvat credit was admissible from 1.1.2005 to 16.6.2005. Prima facie case made out relying on various case law of Tribunal.

Service Tax Credit : The credit of service tax paid by the respondent for availing services of Goods Transport Agency as consignors shall be available to the consignees of the finished goods.Notwithstanding taking of credit of service tax paid under goods transport operator/agency services in respect of incoming consignments, the respondents are eligible to avail the benefit of Notification No. 32/2004-S.T., dt. 3-12-2004.

“intermediary or insurance intermediary”  : The substantive issue involved in this case is whether the appellants are liable to pay the service tax demanded by the Commissioner, for the period July 2001 to March 2006, as a reinsurance broker [within the meaning of “intermediary or insurance intermediary” defined under Section 2(1)(f) of the Insurance Regulatory and Development Authority Act, 1999 read with Section 65(56) of the Finance Act, 1994] in respect of the brokerage received by them from reinsurers abroad as consideration for the service rendered by them as part of the reinsurance transaction between such reinsurers and Indian insurance companies, wherein the subject matter is the same as that of primary insurance transactions between the Indian insurance companies and the insured in India. The Joint Chief Departmental Representative directed to ensure that a special counsel/consultant, who can properly present the Revenue’s case before the Bench, is engaged in this case in the interest of the Revenue.

GTA Service : The condition of not taking “credit of duty paid on inputs of capital goods used for providing such taxable service” necessarily should relate to the services actually rendered by the Transport Agency. The respondent has not actually rendered the said services; as a consignor he has not availed the credit of duty paid on inputs of capital goods for providing such taxable services; the respondent merely paid the tax which, in the normal course, should have been paid by the transport agency. Credit admissible.

Penalty : Since the appellants had paid service tax for the period from April to December, 2005 on the very next day after they took registration, penalty on this amount not imposable. No evidence of suppression of facts with intent to evade payment of tax and imposition of penalty under Section 78 of the Act is not warranted. However, in respect of imposition of penalty for delayed payment of tax for the period January 2005 to March 2005, the penalty under section 76 and section 77 imposable, but the same reduced. BEC vide letter No. 341/18/2004-TRU (PT) dated 17-12-2004 clarified that in case of omission in payment of tax or procedural lapse by persons liable to pay service tax on the goods transported by road before 31-12-2005, no penal provision should be invoked.

Reversal of service tax credit : Stay : Credit of service tax under the category of “Goods Transport Agency” availed by the appellants on receipt of some consignments of iron ore. Later on certain quantity of iron ore was not found upto the mark and returned back the same. There is no such provision to reverse credit of service tax availed in relation to such inputs or capital goods when removed from the factory. sub-rule (5) of Rule 3 of the Cenvat Credit Rules, 2004 provides for recovery of equal amount of credit. Rule 14 of the Cenvat Credit Rules, 2004 provides for recovery of Cenvat credit availed or utilised wrongly. No provision exists in the Finance Act, 1994, which would render utilisation of such credit erroneous for the reason that some of the inputs, transport of which yielded GTA service tax credit are returned as not suitable. The credit availed is anyway used to pay duty on the finished goods. Requirement of pre deposit waived appeal itself decided.

Stay: Goods Transport Operator Service: Received services for which freight charges were paid. Neither service tax paid on it nor returns filed. Clear case of suppression of facts. Plea of protection from recovery as pre deposit because unit being registered u/s 22 of Sick Industrial Companies Act not available. Considering the financial hardship stay partly granted.

Stay: Service Tax credit as input service: The deeming fiction treating the service for which a person is liable to pay service tax to be the output service would apply only in cases where person liable for paying service tax does not provide a taxable service or does not manufacture final products. In other words, if a person is manufacturing final products, the explanation cannot be invoked. However, in view of the decisions cited on behalf of the appellant in which cases also the appellants were manufacturers, the matter would be debatable. Stay partly granted.

GTA Service: The administrative difficulties, illiteracy or any such inconvenience cannot be a ground for non-following of the statutory provisions. The transporters are bound to issue the consignment note or Bills or Challans as defined in Rule 4(B) of Service Tax Rules or any other serially numbered bills. Failure to do so would be a violation of law.

GTA Service : Cenvat Credit : The appellants, while paying Service Tax on GTA Service availed in connection with removal their final product from factory, were doing so on an “output service” and, therefore, they were entitled to utilise, for payment of Service Tax on such service, credit of the tax paid on the input GTA service availed by them in connection with receipt of inputs into their factory.

Cenvat credit : Stay : Cenvat credit used to pay service tax on GTA service availed was in accordance with law, sustainability of the demand to that extent is uncertain. Moreover, the appellants were prima facie eligible for abatement of 75% of the service tax demanded in terms of Notification 32/2004-S.T. The appellants have paid the service tax demanded on receipt of Show Cause Notice. Waiver granted.

Cenvat credit: Input service: Outward transportation: The outward transportation from the factory to the depot is an 'Input Service' and an outward transportation from the factory and from the depot to the premises of the buyer is also an 'Input Service'. There being different opinions expressed by co-ordinate benches, matter referred to the Registry for placing it before the Larger bench.

GTA: Payment of tax by recipient: The assessee is engaged in the manufacture of polyester viscose blended yarn falling under Chapter 55 of CETA, 1985 and are availing benefit of Cenvat credit on inputs, capital goods and Service tax under Rule 3 of Cenvat Credit Rules, 2004. The respondents also got registered under Service tax Rules, 1994 in the category of taxable services rendered by the Goods Transport Agency to discharge the Service tax liability. Entitled to use cenvat credit to discharge tax liability from cenvat credit.

GTA Service: The reliance of the respondents-assessees on the ratio of the decision in L.H. Sugar Factory (supra), which is affirmed by Hon'ble the Supreme Court by its order reported in STO 2005 SC 277 = 2005 (187) E.L.T. 5 (S.C.) is wholly misconceived in view of the amendments in the law, particularly, by insertion of the proviso to Section 68(1) and Section 71A which created enforceable liability of the recipients of services from GTOs during the period from 16-11-1997 to 1-6-1998.

Settled legal position: Mere directions, issued contrary to the settled legal position, cannot be said to be laying down any contrary ratio, so as to constitute an opposite precedent or laying down a contrary proposition. We are of the opinion that the ratio of the decision of Hon'ble the Supreme Court in Gujarat Ambuja Cement Ltd. (supra), cannot be overlooked.

Limitation: The contention that the notices were barred by limitation is wholly misconceived in view of the fact that the revised show cause notices were issued as per the amended provisions of Section 73 which came into force from 10-9-2004 within one year from the relevant date which was defined in sub-section (6) of Section 73

Penalty: Waiver: This is a fit case for invoking the provisions of section 80.

GTA Service: Cenvat Credit: The appellants, while paying service tax on GTA Service availed in connection with removal of their final product from factory, were doing so on an "output service" and, therefore, they were entitled to utilize, for payment of service tax on such service, credit of the tax paid on the input GTA service availed by them in connection with receipt of inputs into their factory.

GTA Service: Input Service credit for service tax paid on removal of finished goods on payment of duty to the buyers premises; extending the credit beyond the point of duty paid removal of the final product, would be contrary to the Scheme of Cenvat Credit Rules.

GTA: Output Service: Cenvat Credit : there is no restriction for utilization of Cenvat credit by the manufacturing unit towards payment of Service Tax as service tax provider.

GTA Service: Penalty: The appellants had paid the tax in question within the period allowed by the Finance Act, 2003 as also that allowed by the apex court in the above case. In the circumstances, they were not liable to be penalized.

Stay: Cenvat Credit: GTA Service: Cenvatable invoice includes an invoice, a bill or challan issued by a provider of input service on or after the 10th day of September, 2004. Invoices having been issued after 10.9.2004 waiver granted.

Goods Transport Agency (GTA): During the period of dispute, Service Tax was not recoverable on GTO service from a recipient thereof.

Goods Transport Agency (GTA): Service Tax Demand: The demand is sustainable if the show cause notice had been issued prior to the amendment. In the present case, the show cause notice has been issued after the amendment to the Finance Act.

Refund: Unjust enrichment: whether the amount paid by the assessee and shown as an expenditure for the year ending 31-3-2003, has gone into cost of production during the next year. Matter remanded for verification.

Service Tax: GTO services : Penalty u/s 76,7 : Appellant deposited service tax on 5-10-05 on goods transport service before issue of show cause notice. Thus, it is squarely covered by the Board's Circular F. No. 341/18/2004-TRU, dated 17-12-04. The present case is covered by the decision of the Tribunal in the case of Auto Transport Services v. Commissioner of Central Excise, Jaipur-II, reported as STO 2006 CESTAT 14  held that no penalty is imposable, where service tax liability and interest leviable thereon paid before issuance of show cause notice. Show Cause Notice is not required to be issued in terms of Section 73 (2A) of Finance Act, 1994, when the tax has been paid by the assessee on his own ascertainment and, therefore, no penalty can be imposed in such cases..(Para 6).

Appeal allowed.
 

Service Tax: Receiver of GTO services: Exemption under Notification No. 43/97 dated 5-11-97: The assessee being a manufacturer owning a registered factory is one of the persons notified as liable to pay Service Tax on GTO service as per the Notification No. 43/97 dated 5-11-97. It is seen that the Tribunal decision in the Bhima S.S.K. Ltd. v. CCE, Pune-III v. CCE, Pune-III -STO 2004 CESTAT 16  relied on by the Commissioner had been passed by a Single Member of the Tribunal in a stay application. In the case of CCE, Meerut-II v. L.H. Sugar Factories Ltd. reported in STO 2005 SC 277 , the Apex Court passed an order agreeing with the following conclusion recorded in the order of the Tribunal impugned before the Supreme Court. "The above would show that even the amended Section 73 takes in only the case of assessees who are liable to file return under Section 70. Admittedly, the liability to file return is cast on the appellants only under Section 71A. The class of persons who come under Section 71A is not brought under the net of Section 73. The above being the position show cause notices issued to the appellants involving Section 73 are not maintainable".In view of the binding ratio of the above judgment of the Apex Court, the impugned order cannot be sustained.(Para 5).
Appeal allowed.

Service Tax: GTO services: SCN issued u/s 73 not sustainable: The Commissioner made demand under Section 73 of the Finance Act, 1994 and imposed an equal amount as penalty on the appellants. In the case of CCE, Meerut v. L.H. Sugar Factories Ltd. (supra), the Apex Court extracted the following finding :- "The above would show that even the amended Section 73 takes in only the case of assessees who are liable to file return under Section 70. Admittedly, the liability to file return is cast on the appellants only under Section 71A. The class of persons who come under Section 71A is not brought under the net of Section 73. The above being the position show cause notices issued to the appellants invoking Section 73 are not maintainable." In the circumstances, the impugned order is not sustainable(Para 5).

Appeal allowed.
 

Service Tax: Receiver of GTO services: SSI exemption under Notification No. 43/97 dated 5-11-1997: Refund: The Finance Act 1994 in terms of Section 66 prescribed the levy on taxable service and Section 68 prescribed the person who shall discharge the liability and Rule 6(i) of the Service Tax Rules, 1994 at the relevant point of time required that Service tax was also collectible from the receiver of taxable service. Such Rule was subject matter of legal scrutiny by the apex court in Laghu Udyog Bharati v. Union of India reported in STO 1999 SC 7 and the Hon'ble Supreme Court held that the tax should be on the value of the Taxable services and it is only the person who provided the services can be regarded assessee and the rules, therefore, cannot be framed which do not carry out the purpose of the chapter and cannot be incompatible with the same in so far as collection of tax from service receiver was concerned. The court in terms of para 16, directed that the tax which were paid by the customers are client of the goods transport operators shall be refunded. In terms of the judgment in the Laghu Udyog Bharati case, realization of the service tax from receiver of taxable service was not found to be legal. The appellant's claim was that they are small scale sector industry and they were exempted from payment of service tax on service provided by goods transporter to the SSI was appreciated by Revenue(Para 6,7). Appellant had deposited the service tax as receiver of service but not as service provider and the Notification No. 41/97 dated 5-11-97 as well as the Notification No. 49/98 dated 2-6-1998 having been rescinded by Notification No. 5/99 dated 28-2-99 and the tax having been paid relating to the period 16-11-97 to 1-6-98, which was neither leviable nor realizable from the appellant and having paid the tax under protest, that shall be refundable. Even if tax is paid under protest, that has also to meet the tests of doctrine of unjust enrichment as held by the Hon'ble Supreme Court in CCE v. Allied Photographics India Ltd. reported in STO 2004 SC 323 (Para 8).
Appeal disposed off.

Service Tax: GTO services: Demand: Law was well known to the authorities below as early as 27-7-99 when Laghu Udyog Bharati case reported in  STO 1999 SC 7 was decided whereas the first appellate order was passed on 27-7-2005. It was also known to authorities below that the Notification No. 42/97 dated 5-11-97 notified the effective date as 16-11-97 as the date of levy of service tax on goods transport operators. Notification No. 49/98 dated 2-6-98 exempted the taxable service provided to a customer by goods transport operator in relation to carriage of goods by road in goods carriage. Soon after that, Notification No. 5/99 dated 28-2-99 rescinded above two notifications. The Hon'ble Apex Court in the case of Laghu Udyog Bharati had held that the provision of Rule 2(d)(xii) and (xvii) in so far as that persons other than the clearing and forwarding agents or the persons other than the goods transport operators as being responsible for collecting the service tax, ultra vires the act itself. Those two sub-rules were accordingly quashed. The implication of Laghu Udyog Bharati judgment was explained by the Hon'ble Apex Court in Para 23 of Gujarat Ambuja Cements Ltd. case reported in  STO 2005 SC 734 (Para 5). When there was no levy on the service user and the Hon'ble Apex Court had already held in Laghu Udyog Bharati case (Supra) that the service user shall not be persons responsible for collection of service tax and the notification prescribing the effective date of levy and exempting the levy as well as Notification of rescission as aforesaid were very well available before the ld. Commissioner (Appeals) on the date of his decision, he should have paid due regard to the law of land. There shall be no levy on the Appellant for the impugned period (Para 6).
Appeal allowed.

Service Tax: Denial of Cenvat credit on GTO services: Stay application: The definition of 'inputs services' as defined in Rule 2(l) of Cenvat Credit Rules, 2004, include transportation of finished goods from the factory to the premises of the customers. As such, the applicant has made out a strong prima facie case(Para 5).

Stay application allowed.
 

GTA Service: Demand from recipients: The payment of tax with interest thereon was voluntary and not under protest and no claim for refund thereof was ever filed.

Refund: GTA: The returns were filed under protest, the assessments were made under protest and the payments of tax were also made likewise. None of these is a valid protest. A return filed in terms of a statutory provision is one filed voluntarily in the eye of law. Any protest in this regard is invalid. Every self-assessment is voluntary and there is no scope for protest in this regard. Payment of tax so assessed is also a voluntary payment. Refund rightly rejected.

Service Tax: Receiver of GTO services: Review proceedings under Section 84 of the Finance Act, 1994: Penalty and interest: The return was filed within the period prescribed under Section 71A of the Finance Act, 1994. Cases in which service tax return had not been filed before the date on which Section 71A came into force by recipients of GTO service and C & F Agents' service for the aforesaid period were considered by the Hon'ble Supreme Court in the case of Gujarat Ambuja Cements Ltd. v. Union of India - STO 2005 SC 734 and the assessees, who had not paid service tax for the said period within the time limit prescribed under Section 71A ibid were given a final chance to pay up the tax dues within an extended period. Their Lordships also made it clear that such assessees paying tax within the time granted by the Court would not be liable to pay interest or penalty.(Para 3,4).
Appeal allowed.

Service Tax: GTO services: Demand: Since the appellant was put under obligation to file service tax return for the first time by virtue of Finance Bill, 2003 as enacted in Section 71A of the Finance Bill 2003, applying the ratio of the decision in the case of L.H. Sugar (Factories Ltd. v. C.C.E., Meerut-II reported in STO 2004 CESTAT 73  , the adjudicating authority has correctly dropped the demand.(Para 4).

Appeal allowed.
 

Service Tax: Cenvat credit of tax paid on receipt of GTO services: The denial of the Cenvat credit to the applicant is on the amount of Service Tax liability discharged by the applicant for the receipt of the services of goods transport operator. The applicant has correctly pointed out i.e. for March, 2005, the service tax liability discharged by the applicant through TR-6 challan, Cenvat credit was allowed by the Commissioner (Appeals), while in this case the Cenvat credit in the month of April, 2005 is sought to be denied. There cannot be two contradictory orders in respect of the same assessee on the same issue.(Para 2,3).
Pre-deposit waived, stay allowed.

Service Tax : GTO services ; Demand, penalty & interest : The amount of service tax paid by them vide TR-6 challan is not service tax liability, the Division Bench of the Tribunal in the case of J.K. Industries Ltd v. CCE, Indore as reported at STO 2006 CESTAT 44 has clearly held if the amount paid by the assessee on his own calculation without any direction or demand from the revenue, the said amount is not refundable.(Para 6). There was no demand of service tax under Section 73 of the Finance Act, 2004 but the amount paid by them was appropriated. As regards the interest demanded from the appellant, the issue is now squarely covered in favour of the appellant in the case of Greenply Industries Ltd. v. CCE, Jaipur as reported STO 2006 CESTAT 419  As regards the penalty, as per Section 71A of the Finance Act, 1994, the appellants were required to file the return in respect of services received from GTO by November 2003, but in this case appellants have filed the returns in December 2003, hence they have not followed the provisions specifically created for the service receivers from GTO. Hence, the penalty imposed on the appellant is upheld. Accordingly, the appellant's appeal regarding the interest being not payable is allowed, while the appellant's appeal against setting aside of demand of service tax and penalty is dismissed.(Para 7,8,9).

Appeal partially allowed.
 

Service Tax: GTO and C & F agent services: Demand u/s 73: In the instant case, the demand was made as per Section 73 of the Finance Act, 1994 (as amended). Section 73 covers only cases of short levy/non levy in respect of assessees who are liable to file returns under Section 70. In the case of 'Goods Transport Operators' and 'C & F agents' services, Section 71A provides for filing of returns. Therefore, the demand made in terms of Section 73 of the Finance Act, 1994 is prima facie not sustainable.(Para 2).

Pre-deposit waived.

Service Tax: GTO services: Show cause notice issued after the amendment to Finance Act: Show cause notice in the present case has been issued after the amendment brought to the Finance Act to levy Service Tax retrospectively in respect of GTO. In terms of the judgments in the case of CCE, Meerut-II v. L. H. Sugar Factories Ltd. - STO 2005 SC 277, demands will be sustainable only if the show cause notice had been issued prior to the amendment. As the show cause notice has been issued after the amendment, the demands cannot be confirmed.(Para 5).

Appeal and stay allowed.

Service Tax: Demand: Recovery u/s 73: It is a settled legal position that a statutory Act may be enacted prospectively or retrospectively. The retrospective effect can be given in case of curative and validating statutes. The curative statutes by their very nature are intended to operate upon and affect past transactions having regard to the fact that they operate on conditions already existing [See, ITW Signode India Ltd. v. Collector of Central Excise reported in STO 2003 SC 166. In the present case, as already held by Hon'ble Supreme Court in Gujarat Ambuja Cements Ltd., (supra), the law must be taken as having always been as was brought out by Finance Act, 2000 and that the statutory foundation for the decision of the Supreme Court in Laghu Udyog Bharati has been replaced and that decision has ceased to be relevant for the purposes of construing the provisions of the Act as amended by the Finance Act, 2000 and 2003. Therefore, the reliance on behalf of the appellant on the earlier decision of the Supreme Court in Laghu Udyog Bharati case (supra) and on the decision of this Tribunal in L.H. Sugar Factories Ltd., case (supra) in which relying upon the decision in Laghu Udyog Bharati it was held that the show cause notices issued in that case by invoking Section 73 of the Act were not maintainable, is misconceived. The applicant has, therefore, not made out any prima facie case in their favour (Para 4).
Appeals disposed off.

Service Tax: GTO services: Show cause notice issued after the amendment to Finance Act: In the present case the show cause notice has been issued subsequent to the amendment brought to the Finance Act to levy the service tax retrospectively in respect of the goods transported by the Goods Transport Operators. Therefore the demand is not sustainable in the light of the judgments in the case of CCE, Meerut-II v. L.H. Sugar Factories Ltd. STO 2005 SC 277 has held that where the Show Cause Notices have not been issued prior to amendment to protect demands, then the amendment brought under Section 71A of Finance Act would not be operative.(Para 3).

Stay application allowed.

Service Tax: Recipient of GTO services: Show cause notice after amendment to Finance Act: Provisions of Clause 117 of the Finance Act, 2000 under which they have been held liable to pay Service Tax does not empower issue of fresh show cause notice subsequent to 12-5-2000 (Notice in the present case was issued on 18-11-02) for recovery of Service Tax for the prior period, in the light of Larger Bench decision in L.H. Sugar Factories Ltd. as upheld by the Supreme Court in STO 2005 SC 277(Para 1).
Stay allowed, pre-deposit waived.

Service Tax: Penalty and interest: The ratio of the decision of the Tribunal in the case of M/s. Greenply Industries Ltd. v. CCE, Jaipur-1 [Final Order No. 626/2006-SM, dated 22-2-2006] squarely applies in this case. This Tribunal has been taking consistent view that the interest, if any at all has to be recovered from the appellants, Imposition of penalty has also been held as incorrect, in an identical issue and hence, imposition of penalty in this case is liable to be set aside.(Para 2)

Appeal partially allowed.

Service Tax: Refund: The case of L.H. Sugar Factories Ltd. & Ors. is not applicable in this appeal as the matter is relating to issuance of show cause notice under Section 73 of the Finance Act, 1994 was challenged, whereas in the instant appeal appellant claimed refund after deposition of service tax and show cause notice was issued to the appellant hence there is no matter of not following of the judicial discipline by the Adjudicating Authority. There is no infirmity in the impugned order in this respect(Para 5,7).

Appeal dismissed.

Service Tax: Recipient of GTO services: Refund of tax paid: Tribunal in the case of M/s. Jindal Steel and Power Ltd. v. CCE, Raipur 2002 (186) E.L.T. 375 (Tri. - Del.) held that "the service tax which was paid by the appellants will be deemed to have been paid under the validated provisions. The question of refund of service tax, which now deemed to have been paid under the provisions, which are validated retrospectively, cannot, therefore, arise".(Para 5). Appellant had not deposited the amount, as Service tax on issuance of any show cause notice. Appellant cannot take advantage of subsequent change in law and file refund claim, specifically when the Service tax liability is not challenged.(Para 6).
Appeal dismissed.

Service Tax: GTO services: Penalty and interest: The ratio as laid down in the Green Ply Industries (supra) case, is squarely applicable in this case, wherein it was held that :- The Finance Bill, 2003 received the assent of the President on 16-05-2003. This would imply that the service receivers, were required to file the returns by 17-11-2003 and discharge their service tax liability. It can be seen that by bringing this Section 71A in the statute, the liability to discharge the service tax was extended up to 17-11-2003. In other words, if an assessee does not pay his service tax liability by 17-11-2003, the interest liability gets fastened on to the assessee till the payment of service tax.". Following the above decision, impugned order as much it applies to the penalty imposed on the appellant is liable to be struck down(Para 5).

Appeal partially allowed.
 

Service Tax: GTO services: Interest and penalty: The issue is squarely covered by the Final Order No. 626/06-SM Branch dated 22-2-2006 — STO 2006 CESTAT 419 in the case of Greenply Industries Ltd. In the said decision the Tribunal has held as :- After the retrospective amendment in Finance Act, 2003, the receiver of the services from G.T.O. was also made liable to pay service tax. Finance Act, 2003, sought to insert a new Section 71A to make the receiver of services of G.T.O. to file returns. By inserting Section 71A, the Finance Act, 2003 made the service receivers to file return to the authorities to ascertain the service tax liability. The said Section 71A also granted time of six months from the date of assent of the bill by the President. The Finance Bill, 2003 received the assent of the President on 16-5-2003. This would imply that the service receivers, were required to file the returns by 17-11-2003 and discharge their service tax liability. In other words, if an assessee does not pay his service tax liability by 17-11-2003, the interest liability gets fastened on to the assessee till the payment of service tax. Penalty set aside(Para 3).

Appeal partially allowed.

Service Tax: Receiver of GTO services: liability: Show cause notice has been issued to all the appellants for recovery of service tax under Section 73 of the Finance Act, 1994. The said recovery under Section 73 was adjudicated and demands confirmed relying upon retrospective amendments to Finance Act, 1994. A Div. Bench of this Tribunal in the case of L.H. Sugar Factory -STO 2004 CESTAT 73 in an identical issue ruled in favour of the assessee. The Revenue aggrieved by the said order challenged it before the Apex Court and the Apex Court in its judgment has held that :- "2. "The above would show that even the amended Section 73 takes in only the case of assessees who are liable to file return under Section 70. Admittedly, the liability to file return is cast on the appellants only under Section 71A. The class of persons who come under Section 71A is not brought under the net of Section 73. The above being the position show cause notices issue to the appellants invoking Section 73 are not maintainable."(Para 4,5).
Appeals allowed.

GTA Service: Stay: The applicant was admittedly registered as a Small Scale Industry. The fact that it was a company did not preclude it from the benefit of SSI under clause (i) of Notification No. 43/97-S.T., dated 5-11-97 Prime facie strong case made out.

Service Tax: Penalty u/s 75,76,77: Exemption from payment of Service Tax as per Notification No. 43/97-ST dated 5-11-1997: Applicants were provisionally registered as SSI Unit from 26-6-1995 and became permanently registered as SSI Unit from 16-6-1998. Prima facie, this letter is not sufficient to hold that prior to 16-3-1998, a unit was registered as Large Scale or medium scale industry, particularly when there was a provisional certificate of registration as SSI of the applicants right from June 95 till March 98. Appellants made a strong prima facie case in their favour(Para 3).

Pre-deposit waived, stay allowed.

Service Tax: GTO services: Show cause notice issued after amendment to the Finance Act: The show cause notice was issued after the amendment brought to the Finance Act to cover the said services. In terms of the cited judgment by the Apex Court rulings in the case of CCE, Meerut-II v. L. H. Sugars Factories Limited reported in STO 2005 SC 277, demands cannot be confirmed as the show cause notice had not been issued prior to the amendment. Penalty set aside(Para 5).

Stay application allowed.

Service Tax: GTO services: Interest: Application for COD: From the condonation of delay application it is obvious that the appeal had been belatedly filed not because of the slow functioning of the department. It is apparent that the Order-in-Appeal was accepted and later, on receipt of instructions from the Chief Commissioner, the subject appeal has been filed with an application for condonation of delay. The appellant was not prevented by any particular circumstance to file appeal in time. Delay in filing the appeal can be condoned if there was sufficient cause for not presenting the appeal within the prescribed period. In the subject case, it cannot be construed that there was any sufficient cause,(Para 6).
Revenue appeal is dismissed.

Service Tax: Receiver of GTO services: Scope and liability: The recipients of services of the goods transport operators were not covered by Finance Act for the period in question. After the amendment of the Finance Act, bringing in such services within the net of Service Tax retrospectively, the demands have been raised. In view of the judgments in the case of L. H. Sugar Factories Ltd. v. CCE [STO 2004 CESTAT 73, the Tribunal has followed the Apex Court judgment in the case of Laghu Udyog Bharati v. Union of India [STO 1999 SC 7 , the demands are not sustainable as it has been held that the show cause notice should have been issued prior to the amendment by the Finance Act. As the same has not been done, the plea for setting aside the demands is justified. The above cited rulings clearly apply to the facts of the case.(Para 3).
Pre-deposit waived, stay allowed.

Service Tax: Refund: It was held that the reliance on the earlier decision of the Supreme Court in Laghu Udyog Bharti's case and on L.H. Sugar Factories Pvt. Ltd., in which, it was held that the show cause notices issued in that case by invoking Section 73 of the Act were not maintainable, was mis-conceived as that ratio was not now applicable and the matter had to be viewed in the context of the amended provisions, the constitutional validity of which was upheld by the Supreme Court in Gujarat Ambuja Cements Ltd.'s case. In this view of the matter, the opponent cannot be allowed to get the refund of the amount paid by way of service tax for the period in question on the strength of the impugned order.(Para 2).

Appeal allowed.

Service Tax: Recipient of GTO services: Penalty and interest: Since the appellants have not been able to prove that their application for considering themselves as an SSI from 3-6-97 was correct and under consideration of District Industries Centre, the order by the lower authorities seems to be correct and does not require any interference in respect of service tax liability and the interest thereon.(Para 5). In respect of the penalty, provision of Section 80 could be invoked in this case inasmuch that the appellant had rightly or wrongly believed that they had sought to be registered themselves as an SSI from 3-6-97. They could have been under a bona fide belief that their letter dated 3-6-97 was under consideration of the District Industries Centre.(Para 6).
Appeal disposed off.

Sevice Tax: Receiver of GTO services: Refund of tax paid: Hon'ble Supreme Court of India vide judgment in the matter of M/s. Gujarat Ambuja Cements Ltd. & Anr. v. Union of India & Anr [Writ Petition (Civil) 539 of 2000] has settled the subject issue and upheld the validity of amendments and the action taken in pursuant to the earlier Rules and further upheld the levy of tax on the recipient of the services. Hon'ble Court directed that the liability to pay interest or penalty on outstanding amounts would arise only if dues are not paid within the period of two weeks from the order passed by the court on 17-11-2003 and in all other cases where tax have been paid and not refunded to the writ petitioners for whatever reason, there is no question of levy of any interest or penalty at all. In view of the above adjudicating authority has correctly rejected the refund claim.(Para 4,5).
Appeal dismissed.

Service Tax: Receiver of GTO services: Demand : In the instant case, the return was filed within six months from 13-5-2003 and, therefore, they are entitled to the benefit of Rule 7A ibid. The filing of return by the appellants was within the time granted to recipients of "goods transport operators service" by the Apex Court vide Gujarat Ambuja Cements Ltd. v. Union of India [2006 (3) S.T.R. 609 (S.C.) = 2005 (182) E.L.T. 33 (S.C.)]. It was specifically held by the Apex Court, in that case, that there could be no levy of interest or imposition of penalty in respect of those who paid tax within the stipulated period. Hence the present appellants are entitled to the benefit of the Supreme Court's judgment as well. The revisional authority grossly erred in demanding interest on tax and imposing penalty on the assessee, regardless of the mandate of the legal provision and the Apex Court's directive.(Para 4).
Appeal allowed.

Service Tax: GTO services: Refund of tax paid: Appellants had submitted the copies of sale invoices, Chartered Accountant's certificate and affidavit to establish the fact that the incidence of service tax has not been passed on to the customers and no rebuttal to the contrary has been given by the department. In Mohan Sales (India) v CCE, Kolkata STO 2003 CESTAT 180, it has been held that proof against unjust enrichment is accepted if local sale invoices and chartered accountant's certificate is produced for which no rebuttal is given by the department. As already observed though there is uniformity of price in this case both before and after, in view of the aforesaid Tribunal judgment namely Mohan Sales (India) v CCE, Kolkata [2003 (158) E.L.T. 667 (Tribunal) = STO 2003 CESTAT 180] on additional points like party providing CA certificate dated 6-12-2003 which is not rebutted by the department. The Revenue is not able to produce any contrary evidence against the evidence produced by the respondents.

Revenue appeal rejected.

Service Tax: GTO services: Show cause notice issued after retrospective amendment to Finance Act : The provisions of Section 117 bringing the retrospective amendment would operate within the time frame provided for the recovery. Since in this case it is not disputed that the show cause notice was issued in October, 2002, almost after 2 years, of the retrospective amendment, I find no infirmity in the Order-in-Appeal of the Commissioner (Appeals). Further the case of L.H. Sugar v. CCE, Meerut [STO 2004 CESTAT 73] relied upon by the Commissioner (Appeals), was taken up by the department to the Supreme Court and the Hon'ble Supreme Court was pleased to dismiss the appeal of the department as reported in STO 2005 SC 277 . In the case of L.H. Sugar v. CCE, Meerut [2004 (165) E.L.T. 161 (Tribunal)the Hon'ble Tribunal has held that:-"Service Tax - Liability to pay - person receiving taxable service of goods transport operators is not liable to tax - Even though these persons are deemed liable to pay tax under Section 69 of Finance Act, 1944 (as amended) as liability to file returns is cast on them only under Section 71A ibid, and not under Section 70 ibid, they are not covered under Section 73 ibid - Liability under Section 73 ibid covers case of the assessee who are liable to file return under Section 70 ibid - Accordingly, they are not liable to pay tax".' (Para 4).
Revenue appeal dismissed.

Service Tax: GTO services: Interest liability: The Finance Bill 2003 received the assent of the President on 16-5-2003. This would imply that the service receivers were required to file the returns by 17-11-2003 and discharge their service tax liability. It can be seen that by bringing this section 71A in the statute, the liability to discharge the service tax was extended up to 17-11-2003. Thus if an assessee does not pay his service tax liability by 17-11-2003, the interest liability gets fastened till the payment of service tax. The Hon'ble Supreme Court in the case of Gujarat Ambuja Cements Ltd. STO 2005 SC 734 (supra) was seized with the challenge to the section 71A wherein, the Hon'ble Supreme Court in its interim order had granted the petitioner a further period of 2 weeks from 17-11-2003 to file return and discharge the service tax due. Since the Hon'ble Supreme Court has granted a further period of two weeks for filing the return and discharge the service tax liability, the interest liability, if any, on the appellants, will be from the period subsequent to the two weeks of 17-11-2003. In this case the appellants have deposited service tax liability on 13-1-2004 and 1-2-2004 and hence interest liability on the appellants will accrue from the expiry of two weeks from 17-11-2003, till the discharge of Service Tax liability by the appellants.(Para 6,7).

Appeal allowed.

Service Tax: GTO services: Penalty u/s 76 and interest u/s 75: The party was not liable to pay the tax in view of the decision of the Tribunal in L.H. Sugar Factories Ltd. v. CCE, Meerut - STO 2004 CESTAT 73 affirmed by the Supreme Court in STO 2005 SC 277. Where tax was not payable, no interest on tax was demandable as held by this Bench in Final Order No. 1549/2005 (2006-TIOL-138-CESTAT-MAD). Recipients of goods transport operators service like the appellants, were exempted from penal liability by Parliament through retrospective amendment of the Finance Act, 1994 vide 117 of the Finance Act, 2000. The Tribunal's decision in Shalimar Paper Mills (P) Ltd. v. CCE - STO 2005 CESTAT 187 also supports the appellants' case with regard to penalty.(Para 3).

Pre-deposit waived.

GTA Service: The Parliament has enacted a valid law with retrospective effect and therefore the earlier judgments become irrelevant and the matter has to be viewed only in the context of the provisions now existing, which clearly provided for the liability of the appellant in respect of the services provided by the goods transport operators for which the appellant paid the freight and was deemed always to have been liable to pay service tax for the period in question, from 16th July, 1997. The appellant was bound to file the returns as mandatorily required by Section 71A and accordingly the return was filed as per this machinery provision, with the payment of service tax as per the challan.

Service Tax: GTO services: Waiver of pre-deposit: Issue is well covered in favour of the appellants vide CCE, Meerut II Vs.  L.H. Sugar Factories Ltd. reported in  STO 2005 SC 277 (Para 2).

Pre-deposit waived, stay granted.
 

Service Tax: GTO services: Refund: The appellants' contentions are mis-construed for the simple reason that the said Notification 43/97-S.T. requires the categories of persons covered from 1 to 7 to pay service tax if they are receiving the services from goods transport operators. The appellants are manufacturing textiles and textile fabrics in their factory at Rajasthan and they are registered under Factories Act and they are also one of the sister concerns of M/s Sutlaj Industries Ltd. From these facts, it is very clear that the appellants are covered by clause (1) and/or (2) of the Notification No. 43/97-S.T., dated 05-11-1997; hence they are liable to pay the Service Tax on the services received by them from the goods transport operators for the period 16-11-1997 to 2-6-1998.(Para 5).

Appeal dismissed.

Service Tax: GTO services: Show cause notice issued u/s 73 :The decision of the Tribunal was upheld by the Supreme Court in case of CCE, Meerut-II v. L.H. Sugar Factories Ltd. reported in STO 2005 SC 277 where the Supreme Court confirmed that liability under Section 73 of the Finance Act, 1994 covers cases of assessee, who are liable to file return under Section 70 and liability to file return being cast on the appellants under Section 71A, show cause notice issued under Section 73 ibid is not maintainable. In view of this position, persons who have filed return under Section 71A cannot be show caused under Section 73 of the Finance Act. Therefore, the Commissioner (Appeals) has correctly dropped the demand.(Para 3,4).
Revenue appeal dismissed.

Service Tax: GTO services: Demand: The facts of this case are identical to the facts of the case of L.H. Sugar Factories Ltd. The decision of this Tribunal in case of L.H. Sugar Factories Ltd. (supra) has been upheld by the Supreme Court in case of CCE, Meerut v. L.H. Sugar Factories reported in STO 2005 SC 277 Section 73 to the Finance Act, 1994 covers the cases of assessees, who are liable to file return under Section 70. Liability to file return on the respondent was under Section 71A. Therefore, show cause notice issued under Section 73 is not maintainable.(Para 5).
Revenue appeal is rejected.

GTA Service: The class of persons who come under Section 71A is not brought under the net of Section 73. The above being the position show cause notices issued to the appellants invoking Section 73 are not maintainable.

Service Tax: GTO services: Demand and penalty: Whether, as recipient of goods transport operators service for the period from 16-11-97 to 1-6-98, were liable to pay service tax to the department in terms of Sections 116 and 117 of the Finance Act, 2002. An identical issue was considered by this Tribunal in the case of L.H. Sugar Factories Ltd. v. CCE reported in STO 2004 CESTAT 73 and it was held that goods transport service recipient had no liability to pay service tax on such service during the above period inasmuch as service recipients were not covered by the provisions of Section 73 of the Finance Act, 1994. The Tribunal's decision in L.H. Sugar Factories Ltd. (supra) was upheld by the Hon'ble Supreme Court in CCE v. L.H. Sugar Factories Ltd. reported in STO 2005 CESTAT 345. (Para 2).

Appeal allowed.

Service Tax: Refund: Unjust enrichment: C.A. certificate: Chartered Accountant's Certificate is a detailed Certificate which has been considered by the adjudicating authority. Appellants are engaged in the manufacture of selling of casting on specific rate of contract. The amount of service tax paid by the appellants is on the goods transport operator. This has not vitiated the contract price in any way. Further the Certificate issued by the professional, generally should not be challenged without having contradictory Certificate from another professional. The Commissioner in his order has not relied on any contradictory Certificate of another professional. In the absence of which, appellants made out a prima facie case for waiver of pre-deposit(Para 5).

Pre-deposit waived.
 

Service Tax: GTO operator : Waiver of pre-deposit: Notification 43/97-ST dated 5-11-1997 is applicable to transport operator and whereas in the instant case, the appellants are not transport operator, but, duty liability was cast on its user. There is divergent view on the same issue(Para 3).

Pre-deposit waived.
 

Service Tax: GTO and C & F Agents: Confirmation of tax liability without issue of show cause notice : It is not in dispute that the Show Cause Notice has not been issued prior to the amendment brought in the Service Tax Act to levy service tax on user of services of GTO and C & F Agents. The period involved in all these matters is 16-7-1997 to 2-6-1998. The Show Cause Notices were issued in the year 2002 & 2004. In terms of the Apex Court judgment rendered in the case of Laghu Udyog Bharati v. UOI - STO 1999 SC 7 the provisions of Rule 2(d)(xii) and (xvii) of Service Tax Rules has been held to be ultra vires. The Tribunal, in the case of L.H. Sugar Factories Ltd. v. CCE, Meerut-II - STO 2004 CESTAT 73 has clearly held that if the Show Cause Notice has not been issued prior to the amendment brought to the Finance Act, 2000 giving retrospective effect, then the demands are not enforceable.(Para 1).

Appeals allowed.
 

Service Tax: GTO and C & F Agents: Confirmation of tax liability without issue of show cause notice: It is not in dispute that the Show Cause Notice has not been issued prior to the amendment brought in the Service Tax Act to levy service tax on user of services of GTO and C & F Agents. The period involved in all these matters is 16-7-1997 to 16-10-1998. The Show Cause Notices were issued in Sept.2001. In terms of the Apex Court judgment rendered in the case of Laghu Udyog Bharati v. UOI - STO 1999 SC 7 the provisions of Rule 2(d)(xii) and (xvii) of Service Tax Rules has been held to be ultra vires. The Tribunal, in the case of L.H. Sugar Factories Ltd. v. CCE, Meerut-II - STO 2004 CESTAT 73 has clearly held that if the Show Cause Notice has not been issued prior to the amendment brought to the Finance Act, 2000 giving retrospective effect, then the demands are not enforceable.(Para 1).
Appeals allowed.
 

Service Tax: GTO services: As a fresh show cause notice has been issued on 19-5-2004 for demanding of service tax under the provisions as amended by the Finance Act, 2003, therefore, the Revenue has accepted the impugned order. Commissioner (Appeals) in the impugned order rightly held that appellants had filed the returns within the time limit stipulated under Section 71A of the Finance Act, 2003 and this finding is in conformity of the provisions of the Finance Act, 2003. Therefore, there is no infirmity in the impugned order. (Para 6).

Revenue appeal dismissed.

Service Tax: Waiver of pre-deposit: Demand: The freight charge on transformers is paid by the purchasers and, therefore, in terms of Section 112(a)(iii) of the Service Tax Act, the person, who pays freight either himself or through his agent for the transportation of goods by road in a goods carriage is liable to pay service tax. Appellants are manufacturers and suppliers of transformers. They have not acted as "agent for the transportation of goods by road in a goods carriage" in terms of proviso (iii) of Section 112(a) of the Service Tax Act.(Para 1,2).

Pre-deposit waived.

Service Tax: GTO services: Demand: It has been settled by the Tribunal's decision in the case of L.H. Sugar Factories Ltd. v. CCE, Meerut-II STO 2004 CESTAT 73 holding that even though persons receiving taxable service of goods transport operators are deemed liable to pay tax under Section 69 of Finance Act, 1944. they are not liable to pay tax as the liability to file returns is cast on them only under Section 71A of Finance Act and not under Section 70 and they are not covered under Section 73 of the Act.(Para 3).

Appeal allowed.

Service Tax : Goods Transport Agency Service : Clearing & forwarding Agents Service : Validation of Tax : It is a well settled principle that validation of a tax declared illegal may be done only if the grounds of illegality or invalidity are capable of being removed and are in fact removed and the tax thus made legal. A legislature is competent to remove infirmities retrospectively and make any imposition of tax declared invalid, valid. Such exercise in validation must of course also be legislatively competent and legally sustainable (para 20,23)

Service Tax: Goods Transport Agency Service: Clearing & forwarding Agents Service: Mutually Exclusive: It has been recognized in Godfrey Phillips (supra) that there is a complete and careful demarcation of taxes in the Constitution and there is no overlapping as far as the fields of taxation are concerned. This mutual exclusivity which has been reflected in Article 246(1) means that taxing entries must be construed so as to maintain exclusivity. Although generally speaking a liberal interpretation must be given to taxing entries, this would not bring within its purview a tax on subject matter which a fair reading of the entry does not cover. (para 24)

Service Tax: Goods Transport Agency Service: Clearing & forwarding Agents Service: Distinction between Object of Levy and Incidence of tax : There is a distinction between the object of tax, the incidence of tax and the machinery for the collection of the tax. The distinction is important but is apt to be confused. Legislative competence is to be determined with reference to the object of the levy and not with reference to its incidence or machinery. There is a further distinction between the objects of taxation in our constitutional scheme. (para 28)

Service Tax: Goods Transport Agency Service: Clearing & forwarding Agents Service: Legislative competence: The substance of the impugned Act must be looked at to determine whether it is in pith and substance within a particular entry whatever its ancillary effect may be. Where the encroachment is ostensibly ancillary but in truth beyond the competence of the enacting authority, the statute will be a colourable piece of legislation and Constitutionally invalid. Apart from passing the test of legislative competency, the Act must be otherwise legally valid and would also have to pass the test of constitutionality in the sense that it cannot be in violation of the provisions of the constitution nor can it operate extraterritorially. (para 29)

Service Tax: Goods Transport Agency Service: Clearing & forwarding Agents Service: Tax on Service of Transportation: It is clear therefore that Section 66 read with Section 65(41)(j) and (ma) Chapter V of the Finance Act, 1994 do not seek to levy tax on goods or passengers. The subject matter of tax under those provisions of the Finance Act, 1994 is not goods and passengers, but the service of transportation itself. It is a levy distinct from the levy envisaged under Entry 56. It may be that both the levies are to be measured on the same basis, but that does not make the levy the same. Therefore the negation of the petitioners submission perforce leads to the conclusion that the Act falls within the residuary power of Parliament under Entry 97 of List I (para 32,33)

Service Tax: Goods Transport Agency Service: Clearing & forwarding Agents Service: Manner of Collection: The point at which the collection of the tax is to be made is a question of legislative convenience and part of the machinery for realization and recovery of the tax. The manner of the collection has been described as "an accident of administration; it is not of the essence of the duty". It will not change and does not affect the essential nature of the tax. By Sections 116 and 117 of the Finance Act, 2000, the tax is sought to be levied from the recipients of the services. They cannot claim that they are not connected with the service since the service is rendered to them. (para 35)

Service Tax: Goods Transport Agency Service: Clearing & forwarding Agents Service: Scope of amendment: All that the proviso to Section 68(1A) did was to prescribe the procedure for collection with reference to services of goods transport operators and clearing agents which services had already been expressly included under the Finance Act, 2000 into the definition of taxable service. The introduction of the proviso to Section 68(1)(A) by the Finance Act, 2003 does not seek in any manner seek to expand that sub-section. In fact it gives effect to it (para 39,40)

Service Tax: Goods Transport Agency Service : Clearing & forwarding Agents Service: Discriminatory nature: Discretionary powers of the Legislature: Because of the inherent complexity of fiscal adjustments of diverse elements in the field of tax, the legislature is permitted a large discretion in the matter of classification to determine not only what should be taxed but also the manner in which the tax may be imposed Courts are extremely circumspect in questioning the reasonability of such classification but after a "judicial generosity is extended to legislative wisdom, if there is writ on the statute perversity, madness in the method or gross disparity, judicial credibility may snap and the measure may meet with its funeral". If the legislature thinks that it will facilitate the collection of the tax due from such specified traders on a rationally discernible basis, there is nothing in the said legislative measure to offend Article 14 of the Constitution (para 41,43)

Service Tax: Goods Transport Agency Service: Clearing & forwarding Agents Service: It has been conceded by the Union of India that the amendments made in the Act would have to be read alongwith the notifications so that the levy and collection of service tax would be only in respect of services rendered by goods transport operators between the period from 16th November, 1997 to 2nd June, 1998. Similarly there can be no tax liability on users of the services of the clearing and forwarding agents beyond 1-9-1999 when by Notification No. 7/99, dated 23-8-1999, the levy of service tax on the services provided by clearing and forwarding agents were exempted. (para 44).

Service Tax: Goods Transport Agency Service: Clearing & forwarding Agents Service: Interest & Penalty: Furthermore the liability to pay interest or penalty on outstanding amounts will arise only if the dues are not paid within the period of two weeks from the order passed by this Court on 17th November, 2003. In those cases in which the tax may have been paid but not refunded to the writ petitioners, for whatever reason, there is no question of levy of any interest or penalty at all. (para 44)

Service Tax: GTO services: Penalty and interest: Section 68 and 70 of Finance Act, 2003 amended retrospectively by the Finance Act, 2003 and a new Section 71A is inserted to validate the collection of service tax from the service receiver in case of service of goods transport operator. This rule provides that in case service is provided by the goods transport operator for the period in question the service receiver shall furnish a return within a period of six months from 13-5-03. In the present case as the respondent had paid the due service tax prior to six months from the date the Finance Act come into force.(Para 3).

Revenue appeal dismissed.

Service Tax : Goods Transport Agency Service : Constitutional Validity : The Supreme Court held that the service tax on mandaps was not in fact tax on land, nor was an entertainment tax, but was tax essentially on service and could be attributed to the residuary power of the Parliament. This judgment covers the present controversy on all fours. Though in the present case the contention was that the tax was in fact tax on movement of goods by road and inland waterways, the case before the Supreme Court was that the tax was on land and buildings and also on entertainment. In principle, there is no difference, between the two cases. (para 19)

Service Tax : Goods Transport Agency Service : It was also contended by some of the Counsels that providing transport would mean - movement of goods, providing of a vehicle, providing the staff like Driver and Conductor and also providing of fuel to the vehicle therefore, the tax could not be levied on such activities. Such activities would not be material, in substance, the tax is levied on providing the service of transportation of goods. Therefore, providing for facilities in order to facilitate the transport of goods would be a factor constituting the service for which the tax is levied. (para 20)

Service Tax: GTO services: This is not a case for imposition of any penalty, as service tax on Goods Transport Operator Service was introduced with effect from 16-11-97 and subsequently exempted with effect from 2-6-98, and the Hon'ble Apex Court vide its Judgment dated 27-7-1999 in the case of Laghu Udyog Bharati reported in STO 1999 SC 7, had struck down the provisions of Service Tax Rules making a person other than the Goods Transport Operators responsible for collecting the service tax, and it was only later that Section 117 of the Finance Act, 2000 validated levy and collection of service tax on Goods Transport Operator Service, retrospectively. Interest payable.(Para 2).

Appeal partially allowed.

Service Tax: GTO tax liability of the service receiver due to retrospective amendment of Finance Act, 2000 under Section 117: Whether Service Tax can be collected from the service receivers even after the provisions contained under Section 117 of Finance Act, 2000, is covered under the Tribunal's decision in the case of L.H. Sugar Factories Ltd. v. Commissioner of Central Excise, Meerut-II STO 2004 CESTAT 73. The Tribunal held that even after the amendment giving retrospective effect to the provisions of Service Tax, such service tax cannot be collected from service receiver of goods transported services during the period 16-11-1997 to 1-6-1998.(Para 1)

Revenue appeal dismissed.

Service Tax: Receiver of GTO services: Demand: In the case of LH Sugar Factories Ltd. & Ors. v. CCE, Meerut-II reported in 2004 (61) RLT 142 wherein the Bench has elaborately dealt with the effect of introduction of Section 71A of the Finance Act, 2003 and Section 73 of Service Tax Act,. Thus no show cause notice could have been issued against them under Section 73 as it stood on the date of issue of show cause notice.(Para 5). The amended Section 73 takes in only the case of assessees who are liable to file return under Section 70. The liability to file return is on the appellants under Section 71A. The class of persons who come under Section 71A is not brought under the net of Section 73. Therefor, show cause notices issued to the appellants invoking Section 73 are not maintainable.(Para 8).

Service Tax: GTO services: Demand: The case of the appellants squarely stands covered by the Division Bench judgment of the Tribunal in the case of L.H. Sugar Factories Ltd. v. CCE, Meerut-II, reported in STO 2004 CESTAT 73 wherein it has been ruled that the person receiving taxable service, from goods transport operators, did not stand covered by the provisions of Sections 70 and 73 of the Finance Act as these were before the amendment and that after the amendment, such a person is liable to file returns only under Section 71A of the Act.(Para 2,5,6).

Appeal allowed.

Service Tax: GTO services: Demand: Stay application and waiver of pre-deposit: Reference to Section 73 is totally unjustified. Liability is cast on the person who is service availer. Since this is a special deeming provision in respect of availer of the services of Goods Transport operators and the recovery of Service Tax has been authorised (validated) in terms of provisions contained in the Finance Act, 2003, the said tax is recoverable from such a person and it is immaterial that the provisions of Section 73 do not apply. The recovery is sustainable only through Section 71A. The said provision authorities collection of Service Tax, from such service availer. The demand has already been issued prior to the date of President's assent to Finance Act, 2003. The appellants are squarely covered under charging provisions of the service tax(Para 4,5).

Stay application dismissed, pre-deposit ordered.

Service Tax: GTA Service: A person receiving taxable service of goods transport operator was not liable to pay service tax under Section 73 of the Finance Act, 1994.

Service Tax: Refund: Sections 116 and 117 of the Finance Act, 2000 amended the provisions relating to Service Tax with retrospective effect thus validating the levy and collection of Service Tax on the services rendered by the transport operators from the user of such services. In view of the retrospective amendment, the Commissioner (Appeals) has rightly rejected the Refund Claim filed by the appellants(Para 3,4).

Service Tax: GTO services during the period 16-11-97 to 1-6-1998: In the present case, appellants are required to re-assess in the light of the new provisions viz. Section 68 and 71A. The appellants shall file fresh returns in terms of the provisions of law and the authorities shall re-assess the liability and pass fresh orders.(Para 6).

Service Tax : Stay from High Court: The Commissioner should not have passed an order when there was a stay by the High Court. In view of this position there is no other alternative but to set aside the impugned order and remand the matter to the concerned Appellate Authority.(Para 4).

Service Tax: GTO services: SSI Exemption: Since the appellant was SSI Unit, he was not required to pay any service tax in respect of service rendered as goods transport operator. During the pendency of the matter before the adjudicating authority, there was a circular bearing No. F. 356/91/97-TRU, dated 6-2-98, to keep the service tax with reference to the SSI Units, in abeyance,(Para 2). The adjudicating authority is required to examine whether the appellants provided the service as a Goods Transport Operator, was of SSI Unit at the relevant point of time,(Para 4).

Service Tax: GTA Services: Demand: Show cause notices were issued requiring the appellants to pay service tax for goods transport operator's service provided to them during the period 16-11-1997 to 1-6-1998 since they had neither applied for registration with the Central Excise authorities nor paid the service tax, hence contravening the Sections 68 and 70 of the Finance Act, 1994, directing them to furnish quarterly return in Form ST-3 and proposing recovery of interest for delayed payment of tax and proposing penal action under Sections 76, 77 and 79 of the Finance Act, 1994.

Prior to the adjudication of the notices, Rule 2(1)(d)(xvii) of the Service Tax Rules, 1994  held ultra vires by Apex Court held in the case of Laghu Udyog Bharti v. Union of India - STO 1999 SC 7 In view of the Supreme Court judgment, the Deputy Commissioner, vide the various orders-in-original, dropped the show cause notices. The Commissioner of Central Excise directed issue of notices for revision of the orders of the Deputy Commissioner, in view of the retrospective amendment of Service Tax Rules by Section 117 of the Finance Act, 2000.  All the appellants were required to pay service tax on the gross amount of the transport charges excluding insurance charges paid by them to the goods transport operator.

Show cause notice issued only under section 76, 77 and 81 and not under section 73 of the Finance Act. Service tax not recoverable.

Service Tax: GTO services: Waiver of pre-deposit: The notice does not propose recovery of service tax but only proposes recovery of interest and penalty (Para 3). on the same ground urged by the applicants, pre-deposit has been waived and recovery stayed by the Tribunal in the case of Transpek Inds. Ltd. etc. vide Stay Order Nos. 2635-2727/2002-WZB/ C-I, dated 23-8-2002 STO 2002 CESTAT 37 Following the same in this case also, the pre-deposit is waived and stay recovery thereof(Para 5).

Service Tax: Waiver of pre-deposit: The basic issue as to whether Section 117 of the Finance Act, 2000 empowers demands and collection of service tax from those who availed of goods transport service, cannot be determined at this interim stage. The plea of limitation is also debatable, having regard to the language of Rule 2(1)(d)(xvii) and Section 65(41)(M) and Sections 69 and 70 of the Finance Act, 1994. In the absence of any proposal for demanding service tax, the requirement of pre-deposit of the service tax amounts is waived and stay recovery thereof, pending these appeals(Para 7).

Service Tax: Validation of the levy and collection of service tax on services rendered by goods transport operators and clearing and forwarding agents: Show cause notice was issued to the Appellants on 18-2-1999. The Dy. Commissioner following the judgment of the Supreme Court in the case of Laghu Udyog Bharti - STO 1999 SC 7 dropped the further proceedings in pursuance of the show cause notice as the Rules had been held to be ultra vires Finance Act, 1994. The Parliament thereafter enacted Section 117 of the Finance Act, 2000(Para 7). A perusal of Section 117 reveals that it validates any action taken or anything done during the period from 16-7-1997 to 12-5-2000. Thus Section not only provides for the recovery of the service tax which had been refunded in pursuance of any judgment or the order but also validates the action taken or anything done notwithstanding anything contained in any judgment, decree or order of any Court, Tribunal, or other authority. The Section also provided that sub-clauses (xii) and (xvii) of sub-rule (1) of Rule 2 of Service Tax Rules, 1944 shall be deemed to be valid at all material times. Clause 113 (which was enacted as Section 117) of Finance Bill, 2000 seeks to give retrospective effect to the said sub-clauses of Service Tax Rules so as to validates the levy and collection of service tax on services rendered by goods transport operators and clearing and forwarding agents from the users of such services. Revenue in the present matter has already taken the steps for levy or imposition or collection of the service tax from the Appellants by way of issuing the show cause notice which is must under the provisions of law as well as in compliance with the principle of natural justice. (Para 8).

Appeal rejected.

Service Tax: Taxability of GTO: 'Goods transport operator' means any commercial concern engaged in the transportation of goods but does not include a courier agency. From the said definition of 'goods transport operator', it is evident that the Service Tax is leviable only on the services provided by a commercial concern engaged in the transportation of the goods. Inasmuch as in the present case, the appellants have received goods directly from the suppliers of the Coke, who have themselves undertaken the deliveries of the goods at the appellants' door-steps, it cannot be said that the appellants received the services of any commercial agency. The said suppliers cannot be held to be transporters. As such, the Service Tax was not payable.(Para 4).

Appeals allowed.

Service Tax: GTO services: As per retrospective amendment of law under Finance Act, 2000 the learned Commissioner reviewed the order. With the enactment of Sections 116 and 117 of Finance Act, 2000 it became clear that service tax was leviable and chargeable from the assessee during the period 16-11-1997 to 2-6-1998 and in accordance with the provisions of Section 117 of Finance Act, 2000 interest at a rate of 24% per annum also became chargeable on late payment of the amount of tax.(Para 4).

Appeals rejected.

Service Tax: The vires of the Government's action of giving retrospective effect to the amendment made in the rules 2(d)(xii) and (xvii) and sub-rules which were earlier struck down by the Apex Court, cannot be gone into by the Tribunal. The Apex Court before whom the matter is said to be subjudice in that regard, has not stayed the operation of the amended provisions. It has not been disputed that after amendment the appellants had become liable to pay service tax. That being so, the impugned order of the Commissioner (Appeals) cannot be said to be in any manner bad in law.(Para 3).

Section 83 of the Service Tax: contains the details of sections of the Central Excise Act, which had been made applicable in relation to the service tax. Non-mention of Section 11A therein is not of any avail to the appellants. Admittedly, before denying the sanctioned refund to the appellants, they were, under the rules of natural justice, required to be heard and for complying with those rules, they were issued notice which has been termed by the appellants as show cause notice. Under the service tax, the Deputy Commissioner was competent to issue notice to the appellants for recovery of service tax for the period in dispute. At that time, the Circular of the Board dated 30-5-2000 was not in existence. Moreover, the provisions of Section 11A of the Excise Act, under which the said circular has been issued by the Board, has not been directly made applicable in relation to the service tax. This circular had been issued subsequent to the period in dispute.(Para 4).

Period of limitation: The provisions of Section 117 of the Act, apply where service tax has already been refunded where the recovery had to be effected within 30 days from the date of the receipt of assent of the President, of the Finance Act. In this case the refund of service tax had not made to the appellants. The amount was still with the department when the notice was issued for denying the actual payment of the same to the appellants. Therefore, the recovery of the service tax cannot be said to be hit by the provisions of Section 117 of the Finance Act.(Para 6).

Appeals dismissed.

Service Tax: GTO Services: Taxability: Initially the service tax on the Goods Transport Operators was withdrawn w.e.f. 2-6-1998 in the light of the decision of the Apex Court in the case of Allied Motors Pvt. Ltd. v. CIT, supra, but thereafter the sub-clauses (xii) and (xvii) of clause (d) of sub-rule (1) of Rule 2 of Service Tax Rules, 1994 had been revalidated with retrospective effect by virtue of amendments made in Sections 117 & 116 of the Finance Act. On account of that revalidation of the Rules, the appellants had become liable to pay the service tax. There is nothing on the record to suggest that if the Apex Court has stayed the operation of the amended provisions of Rule (2) of the Service Tax Rules.(Para 3).

Appeals dismissed.

Service Tax: GTO services: Waiver of pre-deposit and stay: Service tax has been demanded from the appellants as after the amendment in the definition of the 'assessee' as defined under Section 65 of the Service Tax Act, the transport operators also stand included therein. This amendment has been given deemed effect and the past period from 16-7-1997 to 16-10-1998 which is in dispute in these appeals, stands covered. Therefore, there is no any illegality in the impugned order of the Commissioner (Appeals).(Para 4). Partial pre-deposit ordered and on making this deposit, the requirement to pre-deposit the balance service tax amount in both the appeals shall stand waived and recovery stayed till the disposal of the appeals.(Para 6).