2019 (9) TMI 1253 - AT - Service Tax

GTA Service - Demand of service tax on transportation of palm oil fruit - whether the same is a fruit entitled for the exemption of N/N. 33/2004-ST dated 03.12.2004? - transport of fruits is exempted - HELD THAT - Any produce of a tree which is the result of ripened ovary, irrespective of nature of it being edible or not, amounts to fruit. Admittedly, the product transported in the present appeal is palm oil fruit. The photographs as produced by the appellant during the arguments also support the opinion as formed. Thus, the fruit in question is very much covered by the notification. The adjudicating authorities below are therefore held to have formed a very rigid and narrow description of the fruit. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether palm oil fruit is entitled to exemption under Notification No. 33/2004-ST dated 03.12.2004.

Analysis:
The appeal was filed against Order-in-Appeal No. 26/2011 (G) ST dated 14.06.2011. The appellant, a manufacturer of crude palm oil, availed Goods Transport Agency services for obtaining palm oil fruits, which were considered as inputs. The department demanded registration and service tax payment for the services received. The appellant registered and paid the tax but did not file ST-3 returns for the period. The demand was for the period April 2005 to September 2009. The department proposed a demand, which was confirmed by Order-in-Original No.17/2010-ST. The appellant's appeal was rejected by Order-in-Appeal No. 26/2011. The main contention was whether palm oil fruit qualified for exemption under Notification No. 33/2004-ST.

The appellant argued that the transport of palm oil fruit was exempted under Notification No. 33/2004-ST. The department contended that what was actually transported was palm oil, not covered by the notification. The dispute revolved around the definition of "fruit," with the department claiming that non-edible items cannot be classified as fruit. The Tribunal analyzed various definitions of fruit and concluded that any produce of a tree resulting from a ripened ovary, regardless of edibility, qualifies as fruit. The Tribunal found that the palm oil fruit transported by the appellant fell within this definition and was covered by the notification. The lower authorities' narrow interpretation was criticized, and the impugned order was set aside, allowing the appeal with consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant, holding that the palm oil fruit was indeed a fruit entitled to exemption under Notification No. 33/2004-ST. The rigid interpretation by the lower authorities was deemed incorrect, and the appeal was allowed with consequential relief.