T.K. Jayaraman, Technical Member. - Revenue has filed these two appeals against the following impugned Orders-in-Appeal :-

(i)Order-in-Appeal No. 5/2008 G (ST); dated 20-2-2008; and

(ii)Order-in-Appeal No. 4/2008 G (ST) both dated 20-2-2008.

2. We heard both sides.

3. S/Shri K.S. Ravi Shankar and R.D. Murthy, learned advocates appeared on behalf of the respondents. Ms. Joy Kumari Chander, learned Joint CDR appeared on behalf of the revenue.

4. The respondents paid service tax under the category Goods Transport Agency (GTA) in terms of Notification No. 32/2004-ST, dated 3-12-2004, in terms of which, the effective rate of service tax is only 25 per cent of the gross amounts charged from the customer by the GTA. However, revenue proceeded against the respondents on the ground that they had not fulfilled the conditions of the said exemption Notification. Consequently, the differential service tax was demanded. The Original Authority confirmed the demand. The respondents were aggrieved with the orders of the Original Authority and approached the Commissioner (Appeals). After going through the facts of the case, the Commissioner (Appeals) had given a finding that "since the transportation has been undertaken by individuals owning and operating the trucks, they are not registered with the department and the question of availing credit and other facilities does not arise and consequently, they need not follow the procedures prescribed by the Board." After holding that, he allowed the appeals of the respondents with consequential relief.

5. Revenue is aggrieved over the impugned orders on the following grounds :-

"The relevant portion of the 37B Order issued by the Board is reproduced hereunder for ready reference :-

‘These notifications exempt taxable services from so much of service tax as specified therein, irrespective of the person made liable to pay service tax. It is, therefore, clarified that any person who is made liable to pay service tax, while discharging service tax liability on such service, is entitled to avail of the benefit of exemption in terms of aforesaid Notifications No. 32/2004-ST and No. 1/2006-ST, subject to fulfilment of the conditions prescribed therein by adopting the procedure prescribed vide para-31 of Circular No. BI/6/2005-TRU, dated 27-7-2005. The procedure prescribed is that a declaration by the service provider, in all such cases, on the consignment note, to the effect that the conditions of the aforesaid exemption notification have been satisfied, would be sufficient for availing of the benefit under the said notification. Opinion of Law Ministry has also been sought in this matter. Law Ministry has concurred with the above views of the Department.

Therefore, in all such cases, where the above procedure has been followed, no demand notice may be issued on the basis of objection raised by the C&AG Office, and all pending matters may be decided accordingly.’

It is very clear from the Board’s 37B Order that the exemption is available only if declaration is given by the service provider in all such cases on the consignment note to the effect that the conditions of the aforesaid exemption notification have been satisfied. It is also evident from the Board’s orders that the fulfilling of the conditions laid down in the Notification is sine qua non for allowing the benefit of exemption. It, appears that the Commissioner (Appeals) has erred in allowing the exemption to the assessee in the absence of fulfilment of the conditions contained in the Notification.

CESTAT, Bangalore in their Final Order No. 1092-97/07, dated 14-9-2007 (placed as exhibit in the paper book), while dismissing the party appeals in Para 6.1 held that :

‘On a careful consideration, I find that these appeals do not have any merit at all. All the statutory provisions which are mandatory are required to be strictly followed by the tax payees. The administrative difficulties, illiteracy or any such inconvenience cannot be a ground for not following