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TMI Blog2017 (4) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... e normal period and the penalties imposed u/s 76 and 78 are set aside - appeal disposed off - decided partly in favor of appellant. - Service Tax Appeals No. 837 of 2011 and 50686 of 2014 - Final Order No. 52935-52936/2017 - Dated:- 20-4-2017 - Shri S.K. Mohanty, Member (Judicial) And Shri B. Ravichandran, Member (Technical) Shri Z.U. Alvi, Advocate for the appellant Shri Sanjay Jain, Authorized Representative (DR) for the Respondent ORDER Per. B. Ravichandran These are two appeals covering issue of service tax liability of the appellant with reference to their activity of testing and certification of seeds. The appellants are a statutory Agency created by Government of Madhya Pradesh under Section 8 of the Seeds Act, 1966. They are entrusted with the function of ensuring maintenance of minimum standards of purity and germination of seeds as per the standards prescribed. The main point of dispute in these appeals is relating to the liability of the appellant to pay service tax on the fee collected for testing and certifying seeds at the request of the persons in terms of Section 9 of the said Act. The Revenue held a view that the appellants are liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the learned Counsel submitted that service tax of ₹ 2,88,60,509/- was paid by the appellant on 08/03/2010 under coercion and pressure put by the officers of Central Excise. In fact, they have taken service tax registration only on 09/03/2009 and paid the said amount on 10/03/2009. Letter dated 04/05.03.2009 of the Joint Commissioner of Central Excise should be treated as a demand. The said demand is without a proper show cause notice and not legally sustainable. 6. The learned Counsel also contested the service tax liability of the appellant stating that their activities will neither fall under Technical Testing and Analysis as defined under Section 65 (106) nor under Technical Inspection and Certification as defined under Section 65 (108) of the Finance Act, 1994. The appellants are testing the seeds in accordance with International Rules for Seeds Testing, 1976. The basic objective and purpose of activity is certification of the seed, which is not covered under tax entry, technical testing and analysis. It is further contended that the process of technical inspection as defined under Section 65 (108) is confined to mere physical examination of the item and the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Joint Commissioner of Service Tax, Ahmedabad in his letter dated 01/08/2006 addressed to the Director, Gujarat State Seeds Certification Agency, Ahmedabad, clarified that the activity of Seed testing and certification carried out by the Agency would not be covered under service tax. The said communication was forwarded to the appellant by the Ministry of Agriculture, Government of India, vide their letter dated 27/09/2006. In such a situation, no malafide intend to evade payment of service tax can be alleged against the appellant. As such, it is submitted that the demand for extended period as well as various penalties imposed on the appellants by the impugned order dated 22/11/2013, are not legally sustainable. 8. The learned AR submitted that the appellants are engaged in providing service of certification for seeds for persons who are approaching them. Seed testing is not compulsory or a mandatory requirement for all. It is further submitted that the activities of the appellant in connection with testing certification of seeds has been exempted by the Government from payment of service tax vide Notification No. 10/2010-ST dated 27/02/2010. As such, the appellants are el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e their identity during the course of testing and, as such, the activity cannot be called as technical inspection. We are not in agreement with the said assertion of the appellant. The statutory definition talks about inspection or examination of goods vis- -vis specified and pre-set standards, resulting in certification to the effect that the item under inspection conforms to pre-set standards as regards qualities, functions etc. In the present case, the appellants have taken the inspection or examination of seeds in various stages starting from cultivation, harvesting, grading and quality checking in order to arrive at the decision whether the seeds meet the pre-set standards. Thereafter, due certification is given. We find that the activities of the appellant are covered by technical inspection and certification service. The lower Authorities have correctly upheld the service tax liability of the appellant under this category. 11. We also considered the appellant s plea against tax liability on the ground that they are a statutory authority discharging a statutory function and the charges collected for such function cannot be taxed. We have perused the provisions of Seed Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the plea of the appellant that the exemption should be treated as only clarificatory. We find no legal support for such claim. 13. As the service tax liability of the appellant is upheld in our finding, as recorded above, now we examine the appellant s eligibility for refund of service tax paid gathered in appeal No. ST/837 of 2011. The appellants paid the service tax after enquiry was initiated by the Department and there were many correspondence between the Jurisdictional officer and the appellants. The Joint Commissioner of Central Excise vide his letter dated 05/03/2009 directed the appellant to deposit the service tax liability, not paid for the period July 2003 to December 2008, alongwith applicable interest. The appellants have paid the said amount (without any interest) on 10/03/2009. There were no demand proceedings resulting in adjudication of any demand by the competent officer. The appellants paid the service tax liability towards the past dues in one lump-sum payment and filed a claim later for the refund of the same. As the service tax liability of the appellant has been upheld, we find no reason to interfere with the orders of the lower authorities rejecti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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