2013 (10) TMI 344 - AT - Service Tax

Goods Transport Agency - Benefit of Notification No. 33/2004 - Whether the appellant was liable to pay service tax in respect of GTA services availed by them for transportation of flavoured milk Whether the flavoured milk can be considered as milk or not Held that - There was a decision that it was not a milk product, it was not clear whether the expression milk covers flavoured milk also - Further the exemption notification also includes milk along with fruits, vegetables and eggs which were all unprocessed and what emerges from the list of items was that once the goods were processed they may not be covered by the notification. In any case prima facie from the chapter note it appeared that milk as defined in the chapter note does not cover the product of the appellant - the issue required more detailed consideration of the exemption notification, the consideration of provisions relating to interpretation of statutes etc. which can be done at the time of final hearing only - At this stage we consider that the appellant had not been able to make out a prima facie case in their favour - the appellant was directed to deposit the amount within the normal period of limitation Appellant was directed to submit the Pre-deposit upon such Submission rest of the duty to be waived partial stay granted.

Summary

Issues involved:
Whether the appellant is liable to pay service tax for GTA services availed for transporting flavoured milk.

Analysis:
The common issue in both appeals is whether the appellant is required to pay service tax for GTA services used in transporting flavoured milk. The appellant sought exemption under Notification No. 33/2004-ST, which exempts services provided by Goods Transport Agency for transporting fruits, vegetables, eggs, or milk by road. The crux of the matter lies in determining whether flavoured milk qualifies as milk. The appellant argued that flavoured milk should be considered as milk, citing a previous decision by the High Court. However, the respondent contended that the exemption applies only to unprocessed goods, and once processed, like flavoured milk, the exemption does not apply. Reference was made to a case where sweetened flavoured milk was deemed distinct from liquid milk. The ambiguity arises from whether the term "milk" encompasses flavoured milk, given that the exemption covers unprocessed items. The classification of milk under different chapters further complicates the issue, with the respondent suggesting that flavoured milk may not fall under the relevant chapter. The tribunal acknowledged the need for detailed analysis during the final hearing, concluding that the appellant failed to establish a prima facie case.

The tribunal directed the appellant to deposit a specified amount within the stipulated period, with the understanding that compliance would lead to a waiver of pre-deposit for the remaining dues and a stay on recovery during the appeal's pendency. The decision was pronounced in open court, emphasizing the importance of the appellant meeting the deposit deadline and reporting compliance by a set date.