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TMI Blog2013 (11) TMI 1503X X X X Extracts X X X X X X X X Extracts X X X X ..... lso restricted. Under the earlier Notification No.13/2003-ST, business auxiliary service provided by commission agents was exempted from the liability to tax. By Notification No.8/2004-ST, the exemption was restricted to business auxiliary service provided by commission agents in relation to sale or purchase of agricultural produce. Conclusion by the adjudicating authority that commission paid by the petitioner to its overseas agents for facilitating export of rice, sesame seeds, cashew nuts etc. is not entitled to the benefit of exemption Notification No.8/2004-ST, is unsustainable. - stay granted on this issue. Regarding demand of service tax on corporate guarantee commission - held that:- Singapore corporate entity was neither a Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... One category of service, received by the petitioner was from an overseas corporate entity M/s Olam International ltd., Singapore, of which the petitioner is a 100% subsidiary. Another category of service is agency commission remitted by the petitioner in foreign currency for facilitating export of cotton, rice, cashew and sesame claimed to be agricultural produce by the petitioner, a claim contested by Revenue. The other aspect pertains to Corporate bank guarantee. Under this category, the petitioner had remitted corporate guarantee commission during the period 1.10.2004 to 31.3.2011 to Singapore Corporate entity. by another show cause notice dated 22nd April 2010, service tax, interest and penalty was proposed to be assessed for a differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of exemption Notification No.8/2004-ST dated 9.7.2004, a notification issued in modification of an earlier Notification No.13/2003-ST dated 20.6.2003. The claim for exemption was negatived by the adjudicating authority. 6. Prima facie we are satisfied that the adjudication order is in error to the extent benefits of exemption under Notification No.8/2004-ST for the agency commission paid by the petitioner was denied. The total tax assessed in this respect is Rs.8 ,47,605 /-. The petitioner, inter alia exported rice, sesame, seeds cashew nuts etc. Admittedly, processing of these commodities was not done by the cultivator of these agricultural produce but by third party agencies. Whether in the circumstances, the benefit of Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment) defines 'agricultural produce' as meaning: "any produce resulting from cultivation or plantation, on which either no further processing is done or such processing is done by the cultivator like tending, pruning, cutting, harvesting, drying which does not alter its essential characteristics but makes it only marketable and includes all cereals, pulses, fruits, nuts and vegetables, spices, copra, sugar cane, jiggery, raw vegetable fibres such as cotton, flax, jute, indigo, unmanufactured tobacco, betel leaves, tendu leaves, rice, coffee and tea but does not include manufactured products such as sugar, edible oils, processed food and processed tobacco. A TRU clarification issued in Circular No.143/12/2011-ST dated 26.5.2011 clarifies tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ger of the petitioner made on 30.12.2009 (adverted to in para 4 of the adjudication order), that this guarantee was provided by the Singapore corporate entity, to facilitate lending by Indian banking institutions to the petitioner. Prima facie, such corporate guarantee constitutes a service provided by the Singapore entity to the petitioner for facilitating its business for procurement of indigenous agricultural produce etc. for the purpose of its export. Ld. counsel for the petitioner has contended, a contention that did not find favour with the adjudicating authority, that extending of corporate guarantee by the Singapore corporate entity to Indian bank is akin to providing bank guarantee, a service falling within Banking and other Financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Section 65(104(c). We are persuaded to follow this interim order for the reason that provision of corporate guarantee clearly falls outside banking or financial services. 12. On the aforesaid analyses, we grant waiver of pre--deposit and stay all further proceedings pursuant to the adjudication orders impugned in these two appeals, on condition that the petitioner remits Rs.2 ,83,04,550 /- plus proportionate interest on this amount in ST Appeal No.57100/2013; and the petitioner in ST Appeal No.57667/2013; shall remit Rs.66,77,289/- along with proportionate interest thereon, within six weeks from today and report compliance by 5.11.2013. In default, the appeals shall stand dismissed for failure of pre-deposits. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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