ST - Notification 34/04-ST - appellant is not eligible for exemption because entire goods transported by GTA in present case consisted of only single consignment and freight charges for single consignment exceeded Rs 750: CESTAT
By TIOL News Services
MUMBAI, JULY 25, 2014 : THE issue relates to interpretation of Notification No. 34/2004-ST dated 03/12/2004.
The said notification grants exemption from service tax in two situations. The first is where “the gross amount charged on consignments transported in a goods carriage does not exceed rupees one thousand five hundred; the second situation is where “the gross amount charged on an individual consignment transported in a goods carriage does not exceed rupees seven hundred fifty”. As per the explanation appended to the Notification “an individual consignment” means all goods transported by a goods transport agency by road in a goods carriage for a consignee.
In the present case the goods were transported in a goods carriage, which was received by the appellant and the freight charged was Rs.1500/- or less. The entire goods transported consisted of only one consignment and the consignee was the appellant. According to the appellant, the transaction is covered by the first situation i.e. the gross amount charged on consignments transported in a goods carriage does not exceed Rs.1500/-. Therefore, it is their contention that they are exempt from liability to service tax. Reliance is placed on the decision in GondalPrestressed Concrete Vs. CCE, Rajkot- 2012-TIOL-1859-CESTAT-AHM wherein stay has been granted in a similar situation.
Revenue did not agree to this contention and, therefore, a service tax demand was confirmed denying the exemption under notfn. 34/2004-ST; the tax confirmed is Rs.11.90 lakhs and the penalty imposed is Rs.5.95 lakhs along with interest.
As the Commissioner (A) upheld this order the appellant is before the CESTAT and reiterate their stand.
The Revenue representative submitted that the case is squarely covered by the final order in the case of Bellary Iron & Ores Pvt. Ltd. Vs. CCE, Belgaum - 2010-TIOL-704-CESTAT-BANG and where it was held that the assessee is not eligible for exemption.
In his rejoinder the appellant submitted that the findings of the Tribunal in the case cited by Revenue is only an obiter dicta ( a remark in a judgment that is "said in passing") and, therefore, it does not have a binding effect in view of the Bombay High Court decision in Mohandas Issardas vs. A.N. Sattanathan, CC.
The Bench observed that the findings given in the case of Bellary Iron & Ores Pvt. Ltd. (supra) cannot be considered as obiter dicta as the Tribunal had discussed the entire notification and thereafter considered its scope and passed the order. Moreover, the reliance placed by the appellant on the decision in GondalPrestressed Concrete, the same is an interim order and it is a settled position in law that an interim order does not lay down any ratio.
The Tribunal also added -
++ Prima facie it appears that the appellant is not eligible for exemption because the entire goods transported by the GTA in the present case consisted of only a single consignment and the freight charges for the single consignment exceeded Rs.750/- and therefore, in view of the decision of this Tribunal in the case of Bellary Iron & Ores Pvt. Ltd. , the appellant is prima facie not eligible for the exemption.
Noting that the appellant had not pleaded any financial hardship, the CESTAT directed the appellant to make a pre-deposit of the entire service tax demand and report compliance.
(See 2014-TIOL-1335-CESTAT-MUM)
