2015 (10) TMI 452 - AT - Service Tax

Demand of service tax - Receipt of commission for supervising the harvesting and transportation of sugarcane from farmers field to the sugar factory - Held that - issue is now squarely settled by this tribunal in the case of DNYANESHWAR TRUST (2014 (1) TMI 90 - CESTAT MUMBAI). - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Service tax liability on commission received for supervising sugarcane harvesting and transportation.

Analysis:
The case involved two appeals disposed of by a common order due to the same issue. The appellants were providing services of sugarcane harvesting and transportation, registered under man power recruitment and supply agency services, and paid appropriate service tax. However, the Revenue claimed that the commission received from the sugar factory was taxable under business auxiliary services, which the appellants had not discharged. The lower authorities ruled against the appellants.

The consultant referred to a previous tribunal case, arguing in favor of the appeals. On the contrary, the departmental representative contended that the commission received was related to the sale of sugar, not agricultural activities. After considering both sides, the tribunal focused on the service tax liability issue concerning the commission received for supervising sugarcane transportation to sugar factories.

The tribunal referred to a previous judgment involving a similar issue where the appellant sought waiver of duty, interest, and penalties. The appellant claimed exemption under Notification No. 13/2003-S.T., stating that the activity of harvesting and transporting sugarcane was related to agricultural products, thus exempt from service tax. The Revenue argued that the appellant's services constituted business auxiliary services, making them liable for service tax on the amounts received.

The tribunal analyzed the impugned order and found that the appellant's activities were indeed in relation to the sale of sugarcane and acted as a commission agent, qualifying for exemption under Notification No. 13/2002-S.T. The tribunal allowed the appeal, setting aside the impugned order and granting consequential relief. The judgment established that the issue was decisively settled in favor of the appellants based on the previous tribunal ruling.

In conclusion, the tribunal upheld the appellants' position, considering the nature of their services and the applicability of relevant notifications exempting them from service tax liability on the commission received for supervising sugarcane harvesting and transportation to sugar factories.