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2023 (4) TMI 1077 - AT - Service TaxLevy of Service tax - Auctioneer s Service - Business Support Services - Goods Transport Agency Service - suppression of facts or not - extended period of limitation. Auctioneer s Service - marketing and other services rendered for selling agricultural produce of its farmer members - HELD THAT - A numerous judicial decisions have already gone into the differences between Auction and Tender. The Tribunal in M/S. THE SALEM STARCH SAGO MANUFACTURERS SERVICE INDUSTRIAL CO-OPERATIVE SOCIETY LTD. VERSUS CCE ST, SALEM 2018 (3) TMI 192 - CESTAT CHENNAI , has analysed the differences between auction and tender and held that in the traditional method of auctioneering, apart from the auction process per se the auctioneer also provides a gamut of other related services like providing a facility, advertising or illustrating the goods in auction, engage in pre-auction estimates, short term storage services, etc. - while both sale by tender and sale by auction may have a common intendment of selling the goods, the modalities and the processes involved in each are very different and demand do not sustain. Further, Learned Advocate has drawn our attention to M/s. Attur Agricultural Producers Co-operative Marketing Society Ltd. Vs. CCE, Salem, 2019 (8) TMI 262 - CESTAT CHENNAI wherein it has been held This is not service rendered to anybody at all. It is true that, in turn, the appellant has been borrowing money from their bank but it does not mean that the appellant is supporting service of the bank. They are borrowing money from the bank on their account and in turn lending it to their members. In view of the above, we find that demands on both these counts are not sustainable and need to be set aside. The facts in these two appeals are identical. The marketing and other services rendered by the appellant to their farmer members in selling their agricultural produce through tender process would not be coming under Auctioneer s Service under Section 65 (105)(zzzr) of the Finance Act, 1994 - demand do not sustain. Business Support Services - appellants are taking loans from M/s. Salem District Central Co-operative Finance Bank and utilizing this money in providing jewel loans to their farmer members - HELD THAT - The services rendered by the appellant are relatable only to its members and not to the bank and the charges collected for appraising jewels before sanctioning of loans are in the nature of cost incurred by the appellant for sanctioning of loans. As such, there is no BSS rendered in the instant case. As such, the demands raised under the impugned orders demanding service tax under Auctioneer Service and BAS are not maintainable. GTA Services - Non-payment of service tax on transport of goods by road - appellants have undertaken the work of lifting and delivering of goods to the ration shops under the Public Distribution System - period from April, 2006 to March, 2011 - HELD THAT - Reportedly the appellant has undertaken transportation of not only food grains and pulses but also sugar and other articles. The exemption for transport of food grains and pulses is available only with effect from 29th February, 2010. There is a finding in the Order-in-Original that the appellant has failed to give any evidence in order to claim exemption under Notification No. 32/2004-ST which provides for 75% abatement if the transporter has certified as to non-availment of cenvat benefit and also the benefit of Notification No. 34/2004-ST where freight paid on individual consignment upto Rs. 750/- and multi-consignment freight upto Rs. 1500/- exempted from payment of tax. The appellants have failed to submit consignment notes, freight vouchers, ledger account details etc. in order to substantiate their claim for these exemptions. Appellant has relied upon the decision rendered in the case of M/s. Mutual Industries Ltd. Vs. Commissioner of CST, Vapi 2016 (1) TMI 889 - CESTAT MUMBAI , wherein it was held that denial of benefit of 75% exemption under GTA services for want of endorsement on the consignment note to the effect of non-availment of Cenvat credit is not maintainable - Considering this decision, it is held that the appellant is eligible for the benefit of Notification No. 32/2004-ST dated 03.12.2004 in computation of the demand of service tax payable for GTA service rendered - demand of service tax in respect of GTA Service provided is confirmed for the normal period which needs to be computed after according the benefit of Notification No. 32/2004-ST dated 03.12.2004. Extended period of limitation - Suppression of facts or not - HELD THAT - The appellants have put forth that no malafide can be attributed to evade payment of service tax and non-payment of service tax was due to the bonafide belief and there was no deliberate intention for not paying tax and it is the responsibility of the Revenue to discharge the burden that the appellants have deliberately omitted to pay tax. GTA service was introduced w.e.f. January 2005 and the understanding was that individual truck owners engaged would not fall under GTA service - The appellants had mostly undertaken carrying food and other items as part of PDS. So it cannot be said that appellant has wilfully suppressed any facts and so demand in respect of GTA invoking extended period cannot be sustained. As such, penalties imposed under Sections 77 78 of the Finance Act, 1994 are not warranted. Thus, the demands confirmed against the appellant under Auctioneer s Service and Business Support Service are not justified. Consequently, demand of interest and imposition of penalties are also set aside - However, demand of service tax in respect of GTA Service provided is confirmed for the normal period which needs to be computed after according the benefit of Notification No. 32/2004-ST dated 03.12.2004. Appeal allowed in part and part matter on remand.
Issues Involved:
1. Taxability under "Auctioneer's Service" 2. Demand of service tax under "Business Support Service" (BSS) 3. Demand of service tax under "Goods Transport Agency" (GTA) services 4. Invocation of extended period of limitation Summary: 1. Taxability under "Auctioneer's Service": The main issue is whether the appellant's activities fall under "Auctioneer's Service" for marketing agricultural produce. The appellant argued that their activities involve facilitating the sale of agricultural produce through a tender process, not an auction. The Tribunal referred to previous judicial decisions distinguishing auctions from tenders, emphasizing that in tenders, bids are submitted secretly and are not transparent like in auctions. The Tribunal concluded that the appellant's services do not qualify as "Auctioneer's Service" under Section 65(105)(zzzr) of the Finance Act, 1994, as they sell through a tender process. 2. Demand of service tax under "Business Support Service" (BSS): The appellant contended that their activities of providing gold loans against pledged jewels do not constitute BSS. They argued that they are lending money to their members, not supporting the business of the bank from which they borrow funds. The Tribunal agreed, stating that the services rendered by the appellant are to their members and not to the bank, thus not falling under BSS. 3. Demand of service tax under "Goods Transport Agency" (GTA) services: The appellant argued that they should not be liable for service tax under GTA services as they availed services from individual truck owners, which are not covered under GTA. They also claimed exemptions under various notifications. The Tribunal acknowledged the appellant's eligibility for exemptions under Notification No. 32/2004-ST and confirmed the demand for service tax under GTA for the normal period, subject to recalculations considering the exemptions. 4. Invocation of extended period of limitation: The appellant argued that the extended period of limitation should not apply as there was no deliberate suppression of facts. The Tribunal agreed, noting that the issue was interpretational and the appellant had a bona fide belief regarding their tax liabilities. Therefore, the invocation of the extended period was not justified, and penalties under Sections 77 and 78 of the Finance Act, 1994, were not warranted. Conclusion: The Tribunal set aside the demands under "Auctioneer's Service" and "Business Support Service," along with the associated interest and penalties. The demand for service tax under GTA services was confirmed for the normal period, with recalculations considering applicable exemptions. The appeals were allowed with consequential benefits as per law.
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