2026-VIL-1750-CESTAT-ALH-ST
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SERVICE TAX CESTAT Cases

Service Tax - Goods Transport Agency services - Exemption for transportation of agricultural produce, services of hiring vehicles to other Goods Transport Agencies and reverse charge mechanism - Appellant-GTA issuing consignment notes, was served a Show Cause Notice for a financial year, and the demand, modified by the Commissioner (Appeals), was confirmed on the entire amount shown in the Income Tax Return - Whether the receipts of the Appellant are exempt or are liable to service tax in the hands of the Appellant - HELD - The Appellant received amounts against transportation of potato, which is an agricultural produce. Transportation of agricultural produce is exempt under Entry No.21(a) of Notification No.25/2012-ST dated 20.06.2012 - The amount received for giving vehicles on hire to other Goods Transport Agencies is distinctly covered and specifically exempted under Entry No.22 of the same Notification. The Appellate Authority confirmed the demand on the entire amount shown in the Income Tax Return without appreciating that the Appellant was engaged in transportation of goods - As per Notification No.30/2012-ST, the liability to pay service tax on GTA services provided to specified recipients, including a body corporate, is solely on the service recipient under the RCM - The Form-26AS indicating the names of the recipients is enough to prove that such recipients are body corporates. The Appellant, being the service provider, has no statutory liability to pay the tax on such services, and confirming the demand on it is contrary to the specified legal mandate - The receipts against agricultural produce and hire of vehicles are exempt and the confirmation of demand on the entire amount cannot be sustained on this ground - Service Tax - Computation of liability of Goods Transport Agency - Abatement under Notification No.26/2012-ST, threshold exemption under Notification No.33/2012-ST and penalties under Sections 77 and 78 of the Finance Act, 1994 - Appellant contended that, after excluding exempted receipts, the balance was eligible for abatement and threshold exemption, and submitted a calculation of the liability payable - Whether the demand is to be re-determined after abatement and threshold exemption and whether the penalties are sustainable - HELD - Under Notification No.26/2012-ST and its amendments, in the case of transportation of goods by a GTA, abatement is allowed on the amount received and service tax is leviable only on the remaining portion. The proceedings initiated for the preceding financial year were dropped by the Adjudicating Authority, and accordingly the Appellant is eligible for the threshold exemption from the aggregate value of services provided during the relevant financial year under Section 66B in terms of Notification No.33/2012-ST - Applying the exemptions, the threshold exemption and the abatement to the total receipts yields a substantially reduced taxable value, and the figures submitted by the Appellant may be verified and the demand along with applicable interest appropriated from the amount of pre-deposit - The penalties imposed under Sections 78, 77(1)(a), 77(1)(c) and 77(2) are set aside, the demand is modified subject to verification, and the appeal is partly allowed.
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