2019 (10) TMI 326 - AT - Service Tax

Taxability - GTA Services - whether the GTA services used for transportation of foodstuff, which are exempted in terms of the mega notification, would apply vis- -vis the transportation of the edible biscuits? - Revenue s only contention is that biscuits cannot be held to be foodstuff. HELD THAT - We really fail to appreciate the above contention of the revenue, inasmuch as, the biscuits in question are edible biscuits and not gold biscuits. The eatable biscuits would definitely fall under the category of foodstuff. Inasmuch as, the biscuits, as discussed by commissioner (Appeals), is nothing but food, the size and timing for eating the same may change but never the less biscuits remains food item only. No reason stands given by the revenue as to why the biscuits has to be held as different from the category of food. The only contention of the revenue is that foodstuff is relatable to only those items which can be further processed and the biscuits which are ready to use cannot be held to be foodstuff - there are no merits in the above stand of the revenue - The foodstuff is a clear, unambiguous word and there is nothing to indicate that the same would apply to transportation of the raw material etc. which have to be further converted into a final edible product. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Interpretation of the exemption notification for GTA services regarding transportation of foodstuffs.
2. Classification of edible biscuits as foodstuff for exemption eligibility.

Analysis:

Issue 1: Interpretation of the exemption notification for GTA services regarding transportation of foodstuffs
The Tribunal examined whether GTA services used for transporting foodstuffs, exempted under a notification, also applied to the transportation of edible biscuits. The Commissioner (Appeals) had noted that the notification exempted transportation of various food items, including biscuits. The Tribunal emphasized that the exemption should be strictly based on the contents of the notification, which extended to materials consumed by humans directly or after processing. The Tribunal rejected the revenue's contention that biscuits were not foodstuff, emphasizing that edible biscuits fell under the category of foodstuff as they were consumed by humans, satisfying hunger. The Tribunal highlighted that the exemption was not limited to raw materials needing further processing but included items ready for consumption like biscuits.

Issue 2: Classification of edible biscuits as foodstuff for exemption eligibility
The revenue contended that biscuits should not be considered foodstuff as they were ready-to-eat and not for further processing. However, the Tribunal disagreed, stating that the term "foodstuff" was clear and unambiguous, encompassing items directly consumable by humans. The Tribunal found no merit in the revenue's argument that foodstuff only applied to items needing further processing. It held that edible biscuits were indeed food items and fell within the exemption for transportation of foodstuffs. Consequently, the Tribunal rejected the revenue's appeal, affirming that edible biscuits were classified as foodstuff eligible for exemption under the notification.

In conclusion, the Tribunal upheld the classification of edible biscuits as foodstuff for exemption eligibility under the notification, emphasizing that the term encompassed items directly consumable by humans, regardless of the need for further processing.