2011 (8) TMI 156 - AT - Service Tax

Demand - Exemption under Notification No.33/04-ST dated 03.12.04 - the appellant is engaged in providing service of transportation of milk and collection of sale proceeds from various milk parlours on behalf of Indore Dugdh Sangh Maryadit, Indore - The service tax stands confirmed against the appellant on the entire amount inclusive of transportation charges and collection charges on the ground that they were providing business auxiliary service - Assessee submitted that the contract entered into by them with their principal clearly shows the separate charges for transportation of milk as also for distribution of the same and the lower authorities were not justified in observing otherwise - the appellants contention that other distributors of the same principal similarly located have been extended the benefit of notification and by taking into account the adjudication order passed by the Assistant Commissioner, the matter needs reconsideration at the original level - the matter remanded for reconsideration to the original adjudicating authority

Summary

Issues:
1. Applicability of service tax on transportation and collection charges.
2. Exemption under Notification No.33/04-ST for transportation of milk.
3. Exemption under Notification No.6/05-ST for commission received on milk distribution.
4. Benefit of notification extended to other distributors.
5. Reconsideration of the matter at the original level.

Analysis:
The Appellate Tribunal, after waiving the pre-deposit conditions, proceeded to address the appeal concerning the service tax issue related to the transportation of milk and collection of sale proceeds. The appellant's contention was that the service tax was imposed on the entire amount, including transportation and collection charges, under the classification of business auxiliary service. The appellant claimed exemption under Notification No.33/04-ST for the transportation of milk, which was not accepted by the lower authorities on the basis of indivisibility of the contract. Additionally, the demand for commission received for milk distribution was disputed, citing non-consideration of exemption under Notification No.6/05-ST. The appellant highlighted similar distributors benefiting from the said notification, emphasizing separate charges for transportation and distribution in their contract with the principal.

The learned Advocate for the appellant referred to an adjudication order concerning another distributor in a similar situation, wherein relief was granted. The Tribunal acknowledged the existence of other orders favoring distributors of the same principal, indicating a need for reconsideration at the original level. Considering the contentions raised, along with the precedents and the Assistant Commissioner's decision, the Tribunal set aside the impugned order and remanded the matter for review by the original adjudicating authority. The decision was made in light of the information and decisions presented before the Tribunal, emphasizing the need for a fresh assessment based on the provided evidence and legal provisions.

In conclusion, the Tribunal's decision focused on the interpretation of relevant notifications, the treatment of transportation and collection charges, and the applicability of exemptions in the context of similar cases. The judgment highlighted the importance of consistency in applying tax provisions and the necessity for a thorough review based on established legal principles and precedents. The remand for reconsideration underscored the significance of fair and accurate assessment in line with the applicable laws and notifications to ensure proper adjudication of the matter.