GTA- Exemption u/Notf. No. 34/04-ST- Availability of

PJ/Case Laws/2011-12/1434

Case: INVENTAA CHEMICALS LTD. versus COMMISSIONER OF C. EX. & S.T., GUNTUR

Citation: 2011 (24) S.T.R. 382 (Tri. - Bang.)

Issue:- GTA- Exemption under Notification No. 34/2004-ST- available on consignment not exceeding Rs. 1500/- or Rs. 750/- matter pending before the High Court –issue held to be highly debatable – stay granted.

Brief Facts:- Demand of Service tax on GTA service was raised against the appellant. The Original Authority had dropped the demand proceedings but the Revisionary Authority confirmed the demands and imposed penalties in adjudication of Show Cause Notice issued under Section 84 of the Act.

Hence, appellant is before the Tribunal. Application for stay and waiver of pre-deposit is also filed.

Appellant’s Contention:- Appellants contented that they are eligible for the benefit of Notification No. 34/2004-ST dated 3-12-2004 which grants exemption from payment of service tax on GTA service provided that the gross amount charged on consignments transported in a goods carriage does not exceed Rs. 1,500/- or the gross amount charged on individual consignment does not exceed Rs. 750/-. Appellants submitted that they are eligible for exemption in as much as the gross amount charged on each consignment of husk transported to the factory did not exceed Rs. 1500/-.

Respondent’s Contention:- Revenue contended that exemption is admissible only where the gross amount charged on each consignment of husk transported did not exceed Rs. 750/-. That in case of appellant, this condition was not satisfied and, therefore, the benefit of the Notification is not admissible to them.

Reasoning of Judgment:- The Tribunal noted that in reply to the Show-Cause Notice issued by the Commissioner as Revisionary Authority, the appellant had raised a contention with reference to the definition of "GTA" under Section 65(50b) of the Finance Act, 1994. It was also noted that similar contention has been raised in the present appeal.

In this connection, the Tribunal also took judicial notice of judgment in Lakslzminarayana Mining Co. v. Commissioner of Service Tax, Bangalore [2009 (16) S.T.R. 691 (Tri.-Bang.)] wherein it was held that only goods transport agencies and not individual goods transport operators are covered by the aforesaid definition and, therefore, no service tax was leviable on the freight involved in transportation of goods by individual goods transport operators.

It was noted that Revenue had pointed out that this issue is pending before the High Court of Andhra Pradesh. The Tribunal further noted that even if the benefit of Notification No. 34/2004-S.T., dated 3-12-2004 is held to be inadmissible to the appellant, they can still claim the benefit of Notification No. 32/2004- ST which grants abatement from taxable value to the extent of 75%.

The Tribunal was of the view that one of the substantive issues pending with the High Court means the issue is highly debatable. The admissibility of Notification No. 32/2004-ST is not in dispute, but the benefit was not allowed by the Commissioner. Therefore, waiver of pre-deposit and stay granted.

Decision:- Stay Application allowed.

Comment:- This issue has been raised by the department in many units and number of show cause notice has been issued. We can plead that the issue is pending before the High Court.

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PJ/Case Laws/2011-12/1434

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