Radhu Industries vs Cce, Ghaziabad
- CitationAppeal No.ST/484/2009-CU (DB)
Ratio decidendi
The rule this decision rests on
A condition that an exemption notification does not itself prescribe cannot be imposed on the assessee by a CBEC circular, since it is settled law that a circular cannot add conditionalities to an exemption notification. Where an exemption notification conditions the benefit on the transport agency not having availed credit on inputs or capital goods or the benefit of another notification, but does not require that non-availment to be declared on the consignment note, the absence of such a declaration on the consignment note does not by itself defeat the exemption; the assessee may establish satisfaction of the conditions by other evidence, such as declarations from the transporters produced in reply to the show cause notice. Where the assessee has substantially established by such evidence that the notification's conditions were met, and the show cause notice contains no evidence that they were not met, the demand for service tax on the abated amount is not sustainable.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Date of Hearing/Order: 09.07.2015
(Arising out of Order-in-Appeal No.59/CE/Appl/Gzb/09 dated 27.2.09 passed by the CCE(Appeals),Ghaziabad)
Honble Mr.R.K.Singh, Member (Technical)
Honble Ms.Sulekha Beevi C.S., Member (Judicial)
1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? no 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? no 3. Whether their Lordships wish to see the fair copy of the order? seen 4. Whether order is to be circulated to the Department Authorities? yes
Radhu Industries Appellant
Vs.
CCE, Ghaziabad Respondent
Present for the Appellant: Shri Anil Kumar, Advocate
Present for the Respondent:Shri M.R.Sharma, AR
Coram: Honble Mr.R.K.Singh, Member (Technical)
Honble Ms.Sulekha Beevi C.S., Member (Judicial)
FINAL ORDER NO.52393/2015
PER: R.K.SINGH
Appeal has been filed against Order-in-Appeal dated 27.2.2009 which upheld primary adjudication order dated 14.10.2008 in terms of which service tax demand of Rs.5,20,435/- alongwith interest an penalty was confirmed for the period April, 2005 to March, 2006 on the ground that abatement of 75% taken by the appellant under Notification no.32/2004-ST dated 3.12.2004 was not admissible to it because the consignment note issued by the transport agency did not bear the declaration that it had not availed of the benefit of Notification No.12/2003-ST.
2. The appellant has contended that Notification No.32/2004-ST did not contain any condition regarding declaration to be made by the transport agency regarding non availment of the benefit of Notification No.12/2003-ST. Further it submitted declarations from major transporters that no credit on inputs/capital goods was taken nor the benefit of Notification No.12/2003-ST availed.
3. Learned AR on the other hand submitted Boards circular No.B/1/6/2005-TRU dated 27.7.2005 and 5/1/2007 dated 12.3.2007 which clarified that it was incumbent upon the appellant that the consignment notes carried declaration by the transport agency to the effect that credit on input or capital goods was not availed and benefit of Notification No.12/2003-ST was not taken and added that that condition was not satisfied at the time of availing of exemption. Therefore, the demand is sustainable.
4. We have considered the contentions of both sides and perused the Notification N0.32/2004-ST which allow exemption subject to condition that credit on inputs and capital goods is not taken by transport agency nor the benefit of Notification No.12/2003-ST availed by it. The notification nowhere prescribes that declaration to that effect has to be made on the consignment notes for the purpose of claiming the benefit of Notification No.32/2004-ST. Even so the appellant was able to provide such declarations from the major transporters at the time of filing reply to the show cause notice. It is settled law that CBEC circular cannot add conditionalities to an exemption notification. By producing certificates from the major transporters, the appellant substantially established that the conditions of Notification No.32/2004-ST were met. On the other hand, there is not even an iota of evidence in the SCN that the condition of Notification No.32/2004-ST were not satisfied. We find that in a fairly similar case of Venkateshwara Distributors Pvt.Ltd. vs. CCE, Delhi-I-2013 (31) STR 469 (Tri.-Del.), CESTAT allowed the benefit of the said notification. In view of foregoing circumstances, we find that the demand is not sustainable. Accordingly, we set aside impugned order and allow the appeal.
(dictated and Pronounced in the open court)
(SULEKHA BEEVI C.S.) (R.K.SINGH)
MEMBER (JUDICIAL) MEMBER (TECHNICAL)
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