Terex Veetra Equipment (P) Ltd. Vs. Cce - Court Judgment

Excerpt:
2. the applicant is a manufacturer of excisable goods and is paying service tax on the services rendered by "goods transport agency" as a recipient of input services. they were taking credit of service tax so paid by them and utilized the same towards payment of service tax for subsequent period on such input services. the department objected to their utilization of credit of service tax paid by them on such input services towards payment of service tax on input services. according to the department the service tax credit can be utilized only for output services and that the applicant is not rendering any output service.the applicant is not contesting the main issue that, the credit of service tax paid by them cannot be used for payment of service tax relating to incoming transportation, but is claiming the benefit of exemption notification no. 32/2004-st dated 03.12.2004, which provided for payment of service tax on a value equivalent to 25% of the gross amount charged from the customer by such "goods transport agency".3. the learned dr submits that they are not the provider of taxable service of "goods transport agency" and, therefore, not eligible for the concession under exemption notification no. 32/2004-st.4. after hearing both sides, we are of the, prima facie, view that the exemption granted under notification no. 32/2004-st is for the taxable service provided by a "goods transport agency". these services are invariably rendered only by a "goods transport agency" and the tax liability may be on different persons depending upon the situations. in cases when the supplier of the raw material pays the freight, service tax is paid by them and it could be on the recipient of the raw material, namely, the manufacturer, when the freight is paid by them.the exemption, prima facie, is applicable irrespective of the fact, whether the tax is paid by the "goods transport agency" themselves or by the supplier of raw material or recipient of the raw material. we take note of the fact that the duty payable, after taking into consideration the exemption notification, has been paid.5. in the light of the above, we hold that the applicant has made out a strong, prima facie, case for waiver of balance amount of duty and penalty and accordingly we allow the stay petition unconditionally.(dictated and pronounced in the open court on the 12^th day of march, 2008)

Judgment:
2. The applicant is a manufacturer of excisable goods and is paying Service Tax on the services rendered by "Goods Transport Agency" as a recipient of input services. They were taking credit of Service Tax so paid by them and utilized the same towards payment of Service Tax for subsequent period on such input services. The Department objected to their utilization of credit of Service Tax paid by them on such input services towards payment of service tax on input services. According to the Department the Service Tax credit can be utilized only for output services and that the applicant is not rendering any output service.

The applicant is not contesting the main issue that, the credit of Service Tax paid by them cannot be used for payment of Service Tax relating to incoming transportation, but is claiming the benefit of Exemption Notification No. 32/2004-ST dated 03.12.2004, which provided for payment of Service Tax on a value equivalent to 25% of the gross amount charged from the customer by such "Goods Transport Agency".

3. The learned DR submits that they are not the provider of taxable service of "Goods Transport Agency" and, therefore, not eligible for the concession under Exemption Notification No. 32/2004-ST.4. After hearing both sides, we are of the, prima facie, view that the exemption granted under Notification No. 32/2004-ST is for the taxable service provided by a "Goods Transport Agency". These services are invariably rendered only by a "Goods Transport Agency" and the tax liability may be on different persons depending upon the situations. In cases when the supplier of the raw material pays the freight, Service Tax is paid by them and it could be on the recipient of the raw material, namely, the manufacturer, when the freight is paid by them.

The exemption, prima facie, is applicable irrespective of the fact, whether the tax is paid by the "Goods Transport Agency" themselves or by the supplier of raw material or recipient of the raw material. We take note of the fact that the duty payable, after taking into consideration the exemption Notification, has been paid.

5. In the light of the above, we hold that the applicant has made out a strong, prima facie, case for waiver of balance amount of duty and penalty and accordingly we allow the stay petition unconditionally.

(Dictated and pronounced in the open Court on the 12^TH day of March, 2008)