Whether Abatement of 75% on gross value vide Notification No. 1/2006-S.T is available if a transporter is taking any Cenvat credit of the input services used for providing GTA services.

PJ/CASE LAW/2016-17/3184

Case:- MANAGING DIR. OF U.P. STATE BRIDGE COPRN. Versus C.C.E., LUCKUNOW

Citation:- 2016 (41) S.T.R. 431 (Tri. - Del.)

Brief Facts:- This appeal has been filed by the appellant with respect to OIO No. 17/Comm/LKO/ST/2009, dated 31-8-2009. The issue involved is service tax liability upon the appellant on transport of goods by road (GTC services) received by the appellant for the period 1-1-2005 to 31-1-2008. Appellant has not disputed liability of service tax before the Adjudicating Authority but has claimed the benefit of 75% abatement under Notification No. 1/2006-S.T., dated 1-3-2006 before it was withdrawn by issuing another Notification No. 13/2008-S.T., dated 1-3-2008.

Appellant’s Contention:- Shri Ajay Kumar Srivastava, (Authorised Representative) of the appellant appeared for the personal hearing and sought adjournment in the matter on the grounds that their Counsel is busy in his professional work related to a Supreme Court case. However, the reasons given by the appellant are not found justifiable for adjournment and are rejected.

Respondent Contention:-Shri B.B. Sharma, learned AR appearing on behalf of the Revenue argued that benefit of 75% abatement under Notification No. 1/2006-S.T., dated 1-3-2006 is available if a transporter is not taking any Cenvat credit of the input services used for providing GTA services. Learned AR made the Bench go through Para 16.3 of OIO dated 31-8-2009 to argue that appellant has not produced any documentary evidence or a certificate certifying that no Cenvat credit has been taken by the transporter and only stand taken by the appellant is that transporters providing them services are not registered with the Central Excise Department and have not obtained any service tax registration; that no Cenvat credit would have been taken by such transporters.

Reasoning of judgement:-Submissions made by both the sides were carefully considered. The issue involved in the present proceedings is whether appellant is entitled to take 75% abatement as per the provisions contained in Notification No. 1/2006-S.T., dated 1-3-2006. It is observed that under this notification transporters providing services to the appellant should give a declaration that no Cenvat credit of input services is taken. It is the argument of the appellant that subsequent Notification No. 13/2008-S.T., dated 1-3-2008 did not have any condition that any service tax credit on input services has been taken by the transporters and that subsequent Notification No. 13/2008-S.T. convey the intention of the Government for earlier Notification No. 1/2006-S.T. also. The argument made by the appellant is required to be rejected on the grounds that the Notification issued on 1-3-2008 cannot be made applicable to the service tax liability for the period 1-1-2005 to 31-1-2008 when Notification No. 1/2006-S.T., dated 1-3-2006 was operative. When Notification No. 1/2006-S.T. talks of not taking of Cenvat credit on input services taken by the transporter then it is obligatory on the part of the appellant or transporter to at least give a general declaration to the effect that no service credit of input services is taken by the transporters. In the absence of any such certificate the finding recorded by the adjudicating authority in Para 16.3 of the OIO dated 31-8-2009 cannot be faulted with and is required to be upheld. Accordingly there is no reason to interfere with the orders passed by the Adjudicating Authority.

Decision:-The appeal is accordingly dismissed.

Comment:- The gist of the case is the appellant has not produced any documentary evidence to prove that no Cenvat credit has been taken by the transporter and no declaration was also procured from the transporter. Thus the abatement availed was held deniable.

Prepared by:- Bharat

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PJ/CASE LAW/2016-17/3184

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