Declaration on letter head is sufficient when no format has been prescribed.

PJ/Case Law/2013-14/1615

Case:- M/s HERO CYCLES LTD Vs COMMISSIONER OF CENTRAL EXCISE, GHAZIABAD

Citation:- 2013-TIOL-901-CESTAT-DEL

Brief facts:-This appeal is filed by M/s Hero Cycles Ltd. against the Order in Appeal No.172-CE/GZB/2008 Dated 29.08.2008. The brief facts of the case are that the appellants were holding the Service Tax Registration Certificate for discharging the service tax liabilities on the services of "Goods Transport Agency by Road" in terms of provisions of Section 68(2) of the Finance Act, 1994 & Rule 2(1) (d) (v) of the Service Tax Rules, 1994. The Scrutiny of ST-3 Returns of the appellants for the period April, 05 to March, 06 revealed that they had paid service tax on the services of GTA on 25% of gross amount of value without, submitting declaration/certificate from the provider of the said services for the facility of Cenvat Credit on inputs and capital goods and the benefit under Notification No.12/03 ST dated 20.06.2003, as required under Notification No.32/2004-ST dated 03.12.2004. Thus, the appellants were alleged to have wrongly availed exemption under Notification No.32/2004 ST ibid. In view of non-submission of the said declarations, the appellants were required to pay service tax on gross value (100% of the taxable value) and not on 25% of gross value, hence they were alleged to have short paid Service Tax by Rs. 38,70,588/- & Rs. 77,341/- (Edu. Cess) [Total Rs. 39,47,929/-]. A Show Cause Notice dated 20.10.2006 was issued to the appellants demanding service tax of Rs. 39,47,929/- along with interest and also proposing penalties on appellants. Show Cause Notice was adjudicated by the original authority vide order dated 11.10.2007. Appellants preferred appeal before Commissioner (Appeal) who Vide impugned order upheld confirmation of service tax along with interest and set aside the imposition of penalty. Appellants filed the present appeal against the impugned order.

Respondent Contentions:-Respondent contend that the declaration as stated in point (1) and (ii) below should be made on the body of the consignment note:

(i) The credit of duty paid on inputs or capital goods used for providing such taxable service has not been taken under the provisions of the Cenvat Rules, 2004; or

(ii) The goods transport agency has not 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 [2003 [503(E), dated the 20^th June, 2003.

Reasoning of Judgment:-Issue in this appeal relates to abatement of 75% of gross amount charged by Goods Transport Agency under Notification 32/2004-ST dated 03.12.2004. For sake of convenience, this Notification is reproduced below:

"In exercise of the powers conferred by Sub-section(1) of section 93 of the finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service provided by a goods transport agency to a customer, in relation to transport of goods by road in a goods carriage, from so much of the service tax leviable thereon under section 66 of the said Act, as is in excess of the service tax calculated on a value which is equivalent to twenty five per cent, of the gross amount charged from the customer by such goods transport agency for providing the said taxable service:

Provided that this exemption shall not apply in such cases where -

(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 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 [2003 [503(E), dated the 20^th June, 2003]

Also the tribunal in case of M/s Paliwal Home furnishing Vs Commissioner of Service Tax, Delhi reported in 2011 (22) STR (53) has held as under:

“ It has not been denied by the Department that the certificate regarding non availment of Cenvat Credit and benefit of exemption under Notification No.12/03- S.T. from the respective Goods Transport Agencies had been produced by the appellant. When the exemption under Notification No. 32/04-ST and its successor Notification No.1/06-ST is subject to condition that the Cenvat Credit on the inputs or capital goods used for providing the GTA service has not been availed by the GTA or benefit of exemption Notification No.12/03-ST, dated 20th June 2003 has not been availed by the GTA and the Notification does not prescribe any format in which the certificate to this effect is to be provided, in our view, the certificates given by the GTAs on their letter heads in this regard are sufficient and the Department cannot insist that such certificates should on each consignment note. In view of this, the impugned order is not correct. The same is set aside. The stay application also stands disposed of."

Following the above cited decision, the Tribunal found that the appellant were eligible for availment of exemption under notification no. 32/2004 as amended. Accordingly, the appeal was allowed.

Decision: - Appeal allowed.

Comment: -The essence of this case is that when the exemption notification does not prescribes any format in which the certificate to effect the provisions of the law is required to be furnished, the certificates given by GTA on their letter heads are sufficient and the department cannot insist that such declaration should be there on each consignment note.

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PJ/Case Law/2013-14/1615

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