Custom, Excise & Service Tax Tribunal
Lykes Line Ltd vs Commissioner Of Service Tax, Mumbai-I on 19 May, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. ST/253/12-Mum (Arising out of Order-in-Appeal No. YDB/009/2012 dated 30.1.2012 passed by Commissioner of Central Excise (Appeals), Mumbai-I) For approval and signature: Honble Mr. Ramesh Nair, Member (Judicial) and Honble Mr. C.J. Mathew, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Lykes Line Ltd. Appellant Vs. Commissioner of Service Tax, Mumbai-I Respondent Appearance: Shri Bhupendra Singh, Advocate, for appellant Shri Vikram Kaushik, Assistant Commissioner (AR), for respondent CORAM: Honble Mr. Ramesh Nair, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) Date of Hearing: 19.5.2016 Date of Decision: 19.5.2016 ORDER NO Per: Ramesh Nair
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-ST 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-ST 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-ST, 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-ST 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-ST. Being 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-ST 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-ST 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 vs. Sangam Structural Ltd. 2015 (39) STR 1034 (Tri-Del.);
(ii) Advance Diesel Engineering Pvt. Ltd. vs. CST 2008 (10) STR 201;
(iii) Kalpena Industries Ltd. vs. CCE 2013 (32) STR 644 (Tri.-Ahd.);
(iv) Venkateshwara Distributors Pvt. Ltd. vs. CCE 2013 (31) STR 469 (Tri.-Del.);
(v) IOCL vs. CCE 2011 (22) STR 282 (Tri.-Mum.);
(vi) CCE vs. Sunhill Ceramics Pvt. Ltd. 2008 (9) STR 530 (Tri.-Ahmd.);
(vii) CCE vs. HT Media 2011 (23) STR 451 (Pat.);
(viii) Hero Cycles Ltd. vs. CCE 2013-TIOL-901-CESTAT-DEL;
(ix) CST vs. Cadila Pharmaceuticals Ltd. 2012 (27) STR 127 (Guj.);
(x) CCE vs. Ratan Melting & Wire Industries 2008 (231) ELT 22 (SC);
(xi) CCE vs. Dhiren Chemical Industries 2002 (139) ELT 3 (SC);
(xii) Ranadey Micronutrients vs. CCE 1996 (87) ELT 19 (SC).
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-ST 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-ST. 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, 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.
(Pronounced in Court) (C.J. Mathew) Member (Technical) (Ramesh Nair) Member (Judicial) tvu 1 2 ST/253/12