DECLARATION FOR AVAILEMENT OF ABATEMENT

[Mr. M. GOVINDARAJAN]

Notification No. 32/2004-ST, dated 03.12.2004 the Central Government gave exemption to the services provided by the Goods Transport Agency to a consumer, in relation to transport of goods by road in a goods carriage up to 75% of the gross amount charged from the customers by such GTA for providing the said taxable services. This exemption is subject to the conditions as detailed below:

i)	the credit of duty paid on inputs or capital goods used for providing such taxable service has been taken under the provisions of the Cenvat Credit Rules, 2004; or
(ii)	the goods transport agency has availed the benefit under the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 12/2003-Service Tax, dated the 20th June, 2003 [G.S.R. 503 (E), dated the 20th June, 2003].

Notification No. 12/2003-ST, dated 20.06.2003 the Central Government gave exemption so much of the value of all the taxable services, as is equal to the value of goods and materials sold by the service provider to the recipient of service, from the service tax leviable thereon under section (66) of the said Act, subject to condition that there is documentary proof specifically indicating the value of the said goods and materials.

Vide Notification No.1/2006-ST, dated 01.03.2006, the Central Government gave exemptions to the following services subject to conditions for each exemption:

Sl. No.	Service	Percentage
1	Mandap Keeper	40%
2	Tour operator	60%
3	Renting of a cab	60%
4	Holding of convention	40%
5	Erection, commissioning or installation	67%
6	Goods Transport Agency	75%
7	Commercial or Industrial Construction Service	67%
8	Catering	50%
9	Pandal or Shamiana	30%
10	Construction of complex	67%

 

In ‘Paliwal Home Furnishings V. Commissioner of Central Excise’ - 2010 (12) TMI 369 - CESTAT, NEW DELHI, the Tribunal observed that the Notification No. 32/2004-ST and 1/2006-ST do not prescribe any format in which the certificate to the effect of non availment of CENVAT credit on inputs or capital goods and benefit of Notification No. 12/2003-ST to be furnished.   Hence the certificates given by the GTA on their letter heads has been held to the sufficient.   The Department cannot insist that such certificate should be on each consignment note.

 In ‘Micromatic Grinding Technologies Limited V. Commissioner of Central Excise’ – 2011 (10) TMI 104 - CESTAT, NEW DELHI, the Tribunal found that there the Notification itself nowhere lays down as to how the said declaration is required to be made.   It is only by one Board’s circular and clarifications that the Revenue is insisting on making declaration on each and every consignment. Apart from the fact that this is a technical ground, the Tribunal also noted that the GTA provides having made an annual declaration in respect of the consignment, the fact of the same would be as if such declarations have been made in respect of each and every consignment.   As such, Revenue’s objection that an annual declaration would not service purpose cannot be appreciated.

 In ‘Indian Oil Corporation Limited V. Commissioner of Central Excise, Patna’ – Order No. A-510-511/KOL/2012, dated 20.06.2012 the Tribunal found that the appeal revolved around a limited issue of eligibility of abatement of 75% from the gross taxable value of service rendered by a GTA. The point of dispute between the appellant and the Revenue was that the declaration required to be filed by the respective GTA as prescribed by the Board in Circular No. B1/6/2005-TRU, dated 27.07.2005 has not been complied with. The Revenue alleged that the appellant had failed to produce declaration from the respective transport agency in each consignment note to the effect that they had neither availed credit on inputs or capital goods nor benefit of Notification No. 12/2003. The appellants claimed that the declarations were furnished by the respective goods transport agencies in their letter head giving necessary declarations. Besides, in the statement of Bills paid towards transport charges to the respective transport agencies, the said declaration was also made. The Tribunal found that taking note of the difficulties experienced by the Department as well as the assessees the Board has issued further clarification on 21.8.2008 in which it was clarified that the benefit availment of abatement may also be extended in past cases if the taxpayers produce a general declaration from GTA to the effect that neither credit on input or capital goods used for the provision of service has been taken nor the benefit of notification no. 12/2003-ST has been taken by them.

 In ‘Eastern Coalfields Limited V. Commissioner of Central Excise and Service Tax, Bolpur’ – 2012 (10) TMI 492 - CESTAT KOLKATA ,the appellant availed the benefit of Notification No. 32/2004-ST and Notification No.1/2006-ST during the disputed period. The Revenue issued show cause notices to the appellant denying the appellants the benefits of the Notifications alleging that the appellants could not produce the relevant consignment note indicating necessary declaration from transport agency that neither credit on input or on capital goods and benefit of Notification No.12/2003-ST, dated 20.06.2003 had been availed for providing such services by the said transport agencies. The appellants produced the certificates from the respective transport agencies wherein it has been certified that the transporters had not availed the credit of duty paid on inputs or capital goods nor any benefit under Notification No.12/2003-ST dated 20.06.2003. The same has not been accepted and confirmed the demand.   The appellant filed the present appeal to the Tribunal.   The appellant contended that it is not necessary to declare or certify on each and every consignment note issued by the transport agency that they have not availed benefit of Notification No. 12/2003-ST. It would suffice if the respective transport agencies furnish a declaration in any form stating that they have not availed CENVAT credit on capital goods or inputs and/or availed benefit of Notification No.12/2003-ST. The Tribunal held that in the absence of any particular format prescribed under the respective notifications, the department insisting for declaration on each consignment note for allowing the abatement under the said Notification is un-sustainable in law. In these circumstances, the Tribunal held that the declarations filed by the Goods Transport Agency in their letter heads or in the respective payment bills certifying that they have not availed CENVAT credit on inputs or capital goods nor availed the benefit of Notification No.12/2003-ST, dated 20.06.2003 should have been accepted by the Department in extending the benefit of Notification Nos. 12/2003-ST and 1/2006-ST. The Tribunal allowed the appeal.

 Thus in case of service receiver paying service tax is to ensure that the service provider who is availing abatement is to give declaration in each bill about non availment of CENVAT credit etc.,