Custom, Excise & Service Tax Tribunal
Ram Ratna Wires Ltd vs Daman on 18 September, 2024
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench at Ahmedabad
REGIONAL BENCH-COURT NO. 3
Service Tax Appeal No. 10381 of 2018 - DB
(Arising out of OIA-CCESA-SRT-APPEALS-PS-165-2017-18 dated 31/10/2017 passed by Commissioner
( Appeals ) Commissioner of Central Excise, Customs and Service Tax-SURAT-I)
Ram Ratna Wires Ltd ........Appellant
Survey No.,212/2, Near Dadra Check Post, Dadra,
SILVASSA
DADRA & NAGAR HAVELI
VERSUS
Commissioner of C.E. & S.T.-Daman ......Respondent
3RD FLOOR...ADARSH DHAM BUILDING, VAPI-DAMAN ROAD, VAPI OPP.VAPI TOWN POLICE STATION, VAPI GUJARAT-396191 APPEARANCE:
Shri Dhaval Shah, Advocate Appeared for the Appellant Shri Anand Kumar, Superintendent (AR) Appeared for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. C L MAHAR Final Order No.12053/2024 DATE OF HEARING: 01.07.2024 DATE OF DECISION: 18.09.2024 RAMESH NAIR The issue involved in the present case is that whether the appellant while availing the abatement of 75% from the gross amount in respect of goods transport service under Notification No.32/2004- ST has violated the condition that Cenvat credit and benefit of Notification No.12/2003-ST had not been availed when the appellant have produced a general declaration from transport agency to this effect.
2. Shri Dhaval Shah, Learned Counsel appearing on behalf of the appellant submits that a general declaration given by the transport agencies are sufficient as they have clearly declared that transport agencies have not availed either the Cenvat Credit or the benefit of Notification No. 12/2003- S.T. Therefore, on that compliance the benefit of 75% abatement in terms of Notification No. 32/2004-S.T. cannot be denied. He submits that on this very effect and issue involved, various judgments have been given in favour 2 ST/10381/2018 of the assessee. He placed reliance on the following judgments as well as board circular which support the case of the appellant:-
Commr. of Service Tax, Ahmedabad Vs. Cadila Pharmaceuticals Ltd 2012 (27) S.T.R. 127 (Guj.) Lykes Line Ltd Vs. Comm. Service Tax, Mumbai - I 2017 (50) S.T.R. 51 (Tri. Mum) Commr. C., Ex., Patna Vs. Hindustan Co-Cola Beverages Pvt Ltd 2018 (11) TMI 1290 (Tri-Kol) Karuna Agencies Vs. Commr CGST & Central Ex, New Delhi 2023 (12) TMI 438 - CESTAT New Delhi Eastern Coalfields Ltd Vs Commr. C.Ex., & S.T. Bolpur 2013 (29) S.T.R. 314 (Tri - Kolkata) Indian Oil Corporation Ltd Vs. Commr. C. Ex., Patna 2013 (29) S.T.R. 524 (Tri- Kol) Circular No. B1/6/2015-TRU Dated 27/07/2005
3. Shri Anand Kumar, Learned Superintendent (AR) appearing on behalf of the Revenue, reiterates the findings of the impugned order.
4. We have carefully considered the submissions made by both the sides and perused the records. We find that Notification No. 32/2004-S.T. prescribes the condition that the transport agencies should not avail the benefit of Cenvat credit and the benefit of Notification No. 12/2003-S.T in order to extend the benefit of Notification No.32/2004-S.T. to the service recipient who is liable to pay the service tax on reverse charge mechanism. In the present case there is no dispute that the transport agencies have given the declaration for compliance of the aforesaid condition, a sample copy of the declaration is scanned below:-
3 ST/10381/2018 The similar declaration has been given by all the transport agencies. The adjudicating authority did not accept the declaration only on the ground that such declaration should be made on the body of the consignment note.
We completely disagree with the contention of the adjudicating authority as well as the Commissioner (Appeals) that the declaration is only to convey the fact that the transport agency is not availing the Cenvat credit as well as the benefit of Notification No.12/2003-S.T. dated 20.06.2003. It does not make any difference whether the declaration is given by the transport agency is general or it is given on the consignment note. Moreover, the department could not bring any evidence that such declarations are false or the transport agencies have availed the Cenvat credit and Notification No.12/2003-S.T. In such position the denial of the abatement of 75% to the appellant under Notification No.32/2004-S.T. is only on assumption and presumption. On the face of it the declaration given by the transport agencies evident the fact that the transport agencies have not taken the benefit of both provisions. Therefore, we do not find any reason why on the basis of general declaration by transport agency benefit of 75% abatement as provided under Notification No. 32/2004-S.T. can be denied. 4 ST/10381/2018 4.1 This issue has been considered by the Hon'ble High Court of Gujarat in the case of Commr. of Service Tax, Ahmedabad Vs. Cadila Pharmaceuticals Ltd 2012 (27) S.T.R. 127 (Guj.) which is reproduced below:-
Being aggrieved by the order of Customs, Excise & Service Tax Appellate Tribunal (CESTAT), dated 25-2-2010 [2010 (18) S.T.R. 611 (Tri. - Ahmd.)] the present appellant has preferred an appeal u/s. 35G of Central Excise Act, 1944 ("hereinafter referred to as Act") proposing the following questions of law :
1. Whether the Tribunal committed error in interpreting the provisions of Section 37 about binding effect of Circular issued by C.B.E. & C. for availing benefit of exemption notification ?
2. Whether Tribunal committed error in coming to the conclusion that conditions imposed by a Circular for availing exemption is mandatory ?
3. Whether the CESTAT, WZB, Ahmedabad is justified in considering the 'general declarations' given by the GTA (which are not on consignment notes) and confirming the view of Commissioner, Service Tax, Ahmedabad regarding dropping the demand of Service Tax under Section 73(1) of the Finance Act, 1994 for the period from 27-7-2005 to March, 2007 based on these 'general declarations' given by the GTA (which are not on consignment notes) ?
4. Whether the CESTAT, WZB, Ahmedabad was justified in rejection of departmental appeal and confirming the Order-in-Original passed by the Commissioner, Service Tax, Ahmedabad who had not charged interest and imposed penalty thereupon as prescribed in Section 75 and Section 76/78 respectively of the Finance Act, 1994 on the demand for the above referred period ?
2. Heard learned counsel Mr. Y.N. Ravani and with his assistance closely examined the documents placed before this Court.
3. Respondent is engaged in manufacture of P&P medicaments and is also engaged in providing taxable service under the category of 'Technical Inspection & Certification Service' and in the capacity of service receiver, the respondents was liable to pay the service tax on 'Goods Transport Service'. Tribunal considered the Notification No. 32/2004-S.T., dated 3-12- 2004 which provided for abatement of 75% of the gross amount charged from the customer for the purpose of calculating the liability of service tax subject to the condition that the no CENVAT Credit had been availed and benefit of Notification No. 12/2003-S.T., dated 20-6-2003 also had not been availed.
4. Tribunal also held that the requirements prescribed by the Board's Circular was not mandatory and it was working out modality for implementing provisions of law for denial of substantive rights, use of the same cannot be made. Tribunal has dealt with this issue as follows :
"The respondents are paying the service tax as per the reverse charge mechanism and the relevant notification whereby the service receiver is liable to pay the tax. The question to be decided is that how exactly it should be determined as to whether the conditions are fulfilled. The Board had clarified that the endorsement has to be made on the consignment note. Further, we have to take note of the fact that the notification, as such, does not stipulate any such condition. Notification requiring the receiver of the service to pay the tax also does not stipulate any such condition. Therefore, the requirements prescribed by the Board
5 ST/10381/2018 as per circular cannot be mandatory and cannot be used for denying substantive rights. It is not the case of the Revenue that the appellants have not received the service or service tax has not been paid. Therefore, we find that the Commissioner's order is just and fair and does not require any interference. Further, as rightly pointed out in the absence of an appeal against the Tribunal's order, remanding the matter for verification of evidence, that order becomes final and Revenue cannot challenge the impugned order, ignoring the remand order."
5. Similar such issue had arisen for our consideration in Tax Appeal No. 523 of 2010. The said Tax Appeal has been dismissed in the following manner :
"Department is in appeal against the judgment of Customs, Excise & Service Tax Appellate Tribunal ('Tribunal' for short), dated 6-8-2009 by which appeal of the department came to be dismissed. The issue pertains to filing of general declaration instead of consignment-wise declaration by assessee declaring that cenvat credit is not available. Against the decision of the competent authority dated 7-1-2009, the Commissioner (Appeals) allowed the appeal of the assessee holding that assessee is eligible to claim the benefit of exemption on the ground that procedure was substantially complied with as provided in Notification dated 3-12- 2004.
The Tribunal concurred with the view of the Commissioner (Appeals) and dismissed the revenue's appeal relying on the previous decision of the Tribunal reported in 2008 (10) S.T.R. 201.
Counsel for the petitioner candidly stated that above decision of the Tribunal was not challenged. In addition to above, we also perused the reasoning of the Commissioner (Appeals) as well as the Tribunal in the impugned orders. Issues are purely questions of fact and no substantial questions of law are arising.
The appeal, therefore, stands dismissed."
6. Having considered identical questions proposed earlier for consideration, the same were not entertained and therefore in the present Tax Appeal preferred by the Revenue. With no other and further materials having came on record, adjudication and conclusion cannot be different than as was done earlier, this Tax Appeal also requires dismissal and accordingly is disposed of."
4.2 The same issue is dealt by this Tribunal in the case of Lykes Line Ltd (supra) wherein the following order was passed:-
"The demand of service tax was confirmed in respect of service of Goods Transport Agency against the appellant who discharged the service tax on reverse charge basis. The differential service tax was confirmed by denying the Exemption Notification No. 32/2004-S.T., dated 3-12-2004 by which 75% abatement from the gross value of GTA service has been provided. The main ground for denying the exemption is that the Exemption Notification contained the conditions that the transport agency should not avail Cenvat credit and the benefit of Notification No. 12/2003-S.T., dated 20-6-2003 has not been availed. The Central Board of Excise and Customs vide letter F. No. B-1/6/2005-TRU, dated 27-7-2005, has clarified that for availing the abatement of 75% under Notification No. 32/2004-S.T., a declaration on the consignment note to be given by the goods transport agency to the effect that neither the credit on inputs or capital goods used for provision of service has been taken, nor the benefit of Notification No. 12/2003-S.T. has been taken by them. It was contended by the Revenue that this declaration on the consignment note was not obtained by the appellant. Therefore, they are not entitled for the Exemption Notification No. 32/2004-S.T. Being 6 ST/10381/2018 aggrieved by the order-in-original, the appellant filed appeal before the Commissioner (Appeals) who also, concurring with the views of the original authority, upheld the order-in-original and rejected the appeal. Therefore, the appellant is before us.
2. Shri Bhupendra Singh, learned counsel for the appellant, submits that in terms of the Notification, the only condition is that the Cenvat credit should not be availed on the inputs or capital goods used for transport service and the benefit of Notification 12/2003-S.T. should not be availed in respect of the goods transport agency service. He submits that the Board circular prescribing the procedure is not legal and proper for the reason that the Exemption Notification should be read as it is and implemented without importing anything into it. The Notification does not provide any procedure such as obtaining any declaration on the consignment note. Therefore, only on the ground that the procedure laid down in the Board circular is not complied with, the substantive benefit of the exemption cannot be denied unless until the department proves that the appellant has violated the condition of the Notification. He further submits that in the present case, the declaration was indeed obtained from the concerned transport agency on their letter. The same was discarded by the lower authority on the ground that declaration should be obtained on the consignment note. He submits that once a transporter gives a general declaration that no Cenvat credit was availed, in that case there is no need to give declaration of individual consignment. As regards the Notification 12/2003-S.T. in respect of GTA service, no goods is supplied along with the service. Therefore, the question of availment of Notification 12/2003 or otherwise does not arise. Moreover, the department could not adduce any evidence that the appellant has contravened any of these two conditions of the Notification. He submits that on the similar issue, this Tribunal has passed various judgments which are cited below :-
(i) CCE v. Sangam Structural Ltd. - 2015 (39) S.T.R. 1034 (Tri.-Del.);
(ii) Advance Diesel Engineering Pvt. Ltd. v. CST - 2008 (10) S.T.R. 201;
(iii) Kalpena Industries Ltd. v. CCE - 2013 (32) S.T.R. 644 (Tri.-Ahd.);
(iv) Venkateshwara Distributors Pvt. Ltd. v. CCE - 2013 (31) S.T.R. 469 (Tri.-Del.);
(v) IOCL v. CCE - 2011 (22) S.T.R. 282 (Tri.-Mum.);
(vi) CCE v. Sunhill Ceramics Pvt. Ltd. - 2008 (9) S.T.R. 530 (Tri.-Ahmd.);
(vii) CCE v. HT Media - 2011 (23) S.T.R. 451 (Pat.);
(viii) Hero Cycles Ltd. v. CCE - 2013-TIOL-901-CESTAT-DEL;
(ix) CST v. Cadila Pharmaceuticals Ltd. - 2012 (27) S.T.R. 127 (Guj.);
(x) CCE v. Ratan Melting & Wire Industries - 2008 (231) E.L.T. 22 (S.C.);
(xi) CCE v. Dhiren Chemical Industries - 2002 (139) E.L.T. 3 (S.C.);
(xii) Ranadey Micronutrients v. CCE - 1996 (87) E.L.T. 19 (S.C.).
3. Shri Vikram Kaushik, learned Assistant Commissioner (AR) appearing on behalf of the Revenue, reiterates the finding of the impugned order.
4. We have carefully considered the submissions made by both sides.
5. We find that the lower authorities have denied the Exemption Notification 32/2004-S.T. which provides 75% abatement on the gross value of the GTA service for discharging the service tax. In the present case, the appellant is discharging service tax on reverse charge basis as a recipient of service. Firstly, the condition if any imposed on goods transport agency cannot be practically complied with by the recipient of service. Secondly, the department could not prove that the goods transport agency has availed the benefit of Cenvat credit and Notification 12/2003-S.T. The Notification does not provide any condition that any declaration as sought by the department is required to be obtained from the goods transport agency and produce to the department in order to avail the Exemption Notification. Therefore, the Board circular which prescribes the procedure for obtaining the declaration, is not flowing from the Notification. In our view, the Board cannot prescribe any condition or procedure for availing any Exemption Notification. If at all any procedure is required, it should be part and parcel of the Notification, 7 ST/10381/2018 which is not the case here. In the present case, the appellant had provided a declaration from the goods transport agency on their letterhead. It is very surprising to note that the lower authority has discarded the said certificate merely on the ground that the declaration was obtained on the letterhead and not on each consignment note. Once a transport agency gives the declaration that they are not availing the Cenvat credit, that means they are not availing Cenvat credit in all the transactions. Therefore, individual consignment need not bear such declaration. As per the above position, we are of the considered view that the ground on which the Exemption Notification was denied to the appellant is absolutely incorrect. Therefore, the Exemption Notification cannot be denied. As per the judgments cited by the learned counsel, the issue is squarely covered by various judgments. We, therefore, set aside the impugned order and allow the appeal with consequential relief."
In view of the above judgment of the Hon'ble Gujarat High Court as well as this Tribunal's decision, issue is no longer res-integra and consequently the appellant has correctly availed the abatement of 75% under Notification No.32/2004-S.T.
5. Therefore, the impugned order is not sustainable, hence, the same is set aside. The appeal is allowed.
(Pronounced in the open court on 18.09.2024) (RAMESH NAIR) MEMBER (JUDICIAL) (C L MAHAR) MEMBER (TECHNICAL) Bharvi