2018 (9) TMI 27 - AT - Service Tax

Nature of activity - sale or service - Whether the transaction being transfer of right and privilege of export of sugar quota by the appellant on receipt of consideration is a service or sale of goods? - Held that - Tribunal in the case of Commissioner of Central Excise & Service Tax, Meerut-I v. M/s. Bajaj Hindusthan Sugar Ltd. 2017 (10) TMI 1055 - CESTAT ALLAHABAD has held that transaction question regarding the sale of right and privilege of export of sugar quota is sale of goods and no service element is involved - appellant has not provided any service therefore they are not liable to pay Service Tax - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Determination of whether a transaction involving the transfer of the right and privilege of export of sugar quota by the appellant, in exchange for consideration, constitutes a service or sale of goods.

Analysis:

1. Issue: Nature of Transaction - Service or Sale of Goods
- The Tribunal considered the central issue of whether the transaction involving the transfer of the right and privilege of export of sugar quota by the appellant, upon receiving consideration, should be classified as a service or a sale of goods.
- It was noted that the issue had been previously examined by the Tribunal in the case of Commissioner of Central Excise & Service Tax, Meerut-I v. M/s. Bajaj Hindusthan Sugar Ltd., where it was held that the transaction in question, concerning the sale of the right and privilege of export of sugar quota, should be treated as a sale of goods. This decision was based on the precedent set by the Hon’ble Apex Court in the case of Vikas Sales Corporation.
- Consequently, the Tribunal concluded that no service element was involved in the transaction, and therefore, the appellant was not liable to pay Service Tax. As a result, the impugned orders were set aside, and the appeals were allowed with consequential relief.

2. Grant of Early Hearing
- The Tribunal acknowledged that the issue at hand was already addressed in a previous decision of the Tribunal involving M/s. Bajaj Hindustan Sugar Ltd. As the appellant pointed out the similarity of the current case with the earlier decision, the Tribunal deemed it appropriate to grant early hearing of the appeals.
- Both parties agreed to expedite the hearing process, leading to the appeals being taken up for disposal on the same day. This decision was made in consideration of the existing precedent and the mutual agreement between the parties.

In conclusion, the judgment by the Appellate Tribunal CESTAT ALLAHABAD centered on the classification of a transaction involving the transfer of the right and privilege of export of sugar quota as either a service or sale of goods. By relying on previous decisions and legal precedents, the Tribunal determined that no service element was present in the transaction, leading to the appellant not being liable for Service Tax. The decision to grant early hearing further expedited the resolution of the appeals, ultimately resulting in the setting aside of the impugned orders and granting consequential relief to the appellant.