Customs, Excise and Gold Tribunal - Ahmedabad
C.C.E. vs Sunhill Ceramics Pvt. Ltd. on 13 December, 2007
Equivalent citations: [2008]12STJ450(CESTAT-AHMEDABAD), 2008[9]S.T.R.530
ORDER M. Veeraiyan, Member (T)
1. This is an appeal by the Department against the order of the Commissioner (Appeals) No. 30/2007/Commr(A)/Raj dated 20.2.2007.
2. None appeared for the respondent. Heard the learned JDR.
3. The respondent availed services of Goods Transport Agency; as a consignee they paid freight for the incoming consignments and as deemed service provider paid the service tax; they have availed the benefit of Notification No. 32/2004-ST dated 3.12.2004 (effective from 1st January, 2005) by which they were required to pay service tax calculated on a value equivalent to 25% of the gross amount charged by the Transport Agency.
4. The original authority held that the respondent has not produced declaration from the Transport Agency to the effect that they have not taken credit of duty paid on inputs used or capital goods for providing taxable service. The Commissioner (Appeals), on appeal by the party, held that the condition of input credit being taken by the Goods Transport Agency does not arise in this case as the respondent has paid the tax as a consignee. The credit taken by the present respondent is not the tax paid on any puts in relation to the services rendered by the Goods Transport Agency in carrying the goods of received by them. The abatement of 75% of the value for the purpose of paying service tax does not depend upon the credit being taken on the service tax paid by the present respondent as consignee.
5.1. I have carefully considered the submissions. The Commissioner (Appeals) has allowed the appeal after recording his findings which are as follows:
8. Besides, on going through the overall facts and circumstances of case, as also the phrase employed in the proviso (i) to the Notification No. 32/2004-ST supra that 'such taxable service' refers to the Goods Transport Agency and not the appellants-consignees as in the instant cases and therefore, the availment of credit by the appellant-consignees does not put embargo over entitlement of 75% abatement for the purpose of discharging service tax liability on the transportation charges shown in the transport document. It is apparent that the consignee/consignor who have been covered under the condition of the Notification shall have to necessarily pay the service tax of GTA. Since the appellants are deemed provider of service of Goods Transport Agency under Section 68(2) it is obvious that input/capital goods credit for GTA cannot be availed by them as Goods Transport Agency. Therefore, denial of the Cenvat credit of the service tax on GTS services on the grounds that they are availing the benefit of the 75% abatement under Notification No. 32/2004 - ST dated 3.1.2.2004 by the lower adjudicating authority is not justified and not sustainable.
5.2. In respect of the Goods Transport Agency services, the service provider is undoubtedly goods transport agency. However, the liability to pay tax in certain cases has been shifted to either the consignor or to the consignee depending upon who actually paid the freight. In other cases where neither the consignee nor consignor is required to pay the service tax, the responsibility for paying service tax continues with the concerned Goods Transport Agency. 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. The decision by the Commissioner (Appeals) is legal and proper.
6. Therefore, I do not find any reason to interfere with the findings of the Commissioner (Appeals). The appeal is rejected.
(Dictated and pronounced in the open Court)