2018 (7) TMI 1924 - AT - Service Tax

Benefit of N/N. 32/2004-ST dated 03.12.2004 and 1/2006-ST dated 01.03.2006 - Requirement of declaration on the consignment notes - HELD THAT - Since the required declarations have been submitted on the letterheads by the Transporters and that there is no legal requirement to submit the declarations on the consignment notes which is not issued by the transporters in appellant s case - Even otherwise the non-submission of declaration on the consignment notes is a procedural lapse and would not result in denial of substantive benefit to the Appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Interpretation of legal provisions regarding service tax on Goods Transport Service.
2. Validity of abatement of 75% on freight amount for transportation services.
3. Requirement of declaration on consignment notes for availing abatement benefits.
4. Applicability of Notifications 32/2004-ST and 1/2006-ST for obtaining declarations.
5. Dispute regarding procedural compliance with declaration requirements.
6. Consideration of case laws and tribunal judgments on abatement under relevant notifications.
7. Determination of entitlement to abatement benefits based on declaration submission.

Interpretation of Legal Provisions:
The case involved the interpretation of legal provisions related to the imposition of service tax on Goods Transport Service, particularly focusing on the reverse charge mechanism for taxing services provided by transportation agencies. The appellant, engaged in coal production, availed transportation services within mining areas and paid service tax under reverse charge after claiming a 75% abatement on freight amount.

Validity of Abatement Benefits:
The dispute centered around the validity of the abatement of 75% on the freight amount for transportation services. The appellant had obtained declarations from transport contractors confirming compliance with conditions for abatement but on their letterheads instead of consignment notes. The issue arose when a Show Cause Notice was issued to deny the abatement due to the absence of declarations on consignment notes.

Requirement of Declaration on Consignment Notes:
The contention revolved around whether the required declaration for availing abatement benefits should be made on consignment notes or if a general declaration on the transporters' letterheads would suffice. The appellant argued that the absence of declarations on consignment notes should not disqualify them from claiming the prescribed abatement.

Applicability of Notifications and Compliance Requirements:
The case involved a detailed analysis of Notifications 32/2004-ST and 1/2006-ST, which prescribed conditions for obtaining declarations to avail abatement benefits. The tribunal examined whether the department's insistence on declarations on consignment notes was legally sustainable in the absence of a specific format requirement under the notifications.

Consideration of Case Laws and Tribunal Judgments:
The tribunal considered relevant case laws and judgments, including IOCL vs. CCE Patna and Ganesh Cement Pvt Ltd. vs. CCE Allahabad, to determine the interpretation of abatement provisions under the notifications. The judgments highlighted that declarations on transporters' letterheads could be sufficient for claiming abatement benefits, challenging the department's insistence on consignment notes.

Entitlement to Abatement Benefits:
Based on the settled legal position by the tribunal and case law analysis, it was concluded that the appellant was rightfully entitled to the abatement benefits. The tribunal emphasized that the absence of declarations on consignment notes was a procedural lapse and did not warrant denial of substantive benefits to the appellant. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.

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