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TMI Blog2017 (5) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... divelu, Advocate for the appellants in appeal Nos.ST/1940/2012, ST/449/2012, ST/30365/2016, ST/25324/2013, ST/23403/2014, ST/1/2011, ST/28427/2013, ST/20383/2014, ST/1121/2012, ST/2798/2012, ST/450/2012, ST/2365/2012, And ST/27967/2013 Shri G. Prahlad, Advocate for the appellant in appeal No.ST/2075/2012. Shri P.R.V. Ramanan, Special Counsel for the Revenue as respondents and appellant. ORDER [Order per: (Dr) Satish Chandra] The issues involved in these appeals pertain to the demand of service tax on Business Auxiliary Service (BAS), Goods Transport Service (GTA service) end Renting of Immovable Property Service. Hence, all the appeals involving technical issues are disposed by this common order. 2. The issues involved in each of these appeals the disputed tax amounts involved/confirmed/set aside in impugned orders in each case is tabulated as under : S. No. Appeals No. Appellant Name Amount involved in BAS (Rs.) Amount involved in GTA (Rs.) Amount involved in Renting of immovable property (Rs.) 1. ST/341/ 2011 M.L. Agro Products Ltd. 8,66,65,781/- 5,23,412/- N/A 2. ST/2026/ 2012 Alliance one Industries India (P) Ltd. 3,57,50,467/- 6,25,190/- N/A 3. ST/204 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30. ST/23768/ 2014 Maddi Lakshmaiah & Co. Ltd. 1,21,14,056/- 37,414/- N/A 31. ST/2025/ 2012 Alliance One Industries India (P) Ltd. 1,19,19,903/- 2,20,133/- N/A 32. ST/1941/ 2012 M.L. Agro Products (P) Ltd. 1,54,01,904/- 37,808/- N/A 33. ST/1940/ 2012 Mahi Agro Products (P) Ltd. 1,87,80,431/- N/A N/A 34. ST/21015/ 2014 CCE, C. & S.T., GUNTUR 47,00,458/- Set aside by OIA N/A N/A 35. ST/2086/ 2012 Polisetty Soma-sundaram 1,00,32,862/- 1,75,350/- N/A 36. ST/2144/ 2012 DTE Exports (P) Ltd. 95,62,717/- 1,27,593/- 6,180/- 37. ST/25730/ 2013 Maddi Lakshmaiah & Co. Ltd. 8,72,19,315/- 9,22,321/- 5,68,95,322/- 38. ST/410/ 2011 Alliance One Industries India (P) Ltd. 3,62,23,558/- 26,49,904/- N/A 39. ST/26978/ 2013 Premier Tobacco Packers (P) Ltd. 57,32,393/- 2,02,907/- 1,91,821/- 40. ST/30368/ 2016 Alliance One Industries (P) Ltd. 2,05,50,911/- 9,48,151/- N/A 41. ST/27968/ 2013 Indian Tobacco Traders N/A 49,145/- N/A 42. ST/2798/ 2012 C.C., C.E. & S.T. GUNTUR 4,70,604/- Set aside by OIA N/A N/A 43. ST/26433/ 2013 M.L. Agro Products (P) Ltd. 1,92,57,626/- 52,030/- N/A 44. ST/2164/ 2012 Premier Tobacco Packer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n one case (Sl.No. 16 of table), department is in appeal on non-imposition of penalities by adjudicating authority. 3.4 With this background, we heard Shri Y. Sreenivasa Reddy, Shri Ch. Venkateshwara Rao, Shri S. Sankaravadivelu and Shri G. Prahlad, learned advocates for the assessees. The submissions of these counsels can be summarised as under : (i) Department has wrongly demanded service tax liability under BAS, which was introduced w.e.f. 01/07/2006 under S65(19) of the Finance Act, 1994. They submit that as per Notification No.14/2004 dt. 10/09/2014, they are exempted from tax liability on BAS for the reason that their services are "in relation to agriculture". Further they submit that has per the Notification No.19/2005-St dt. 07/06/2005, the words in clause (b) of Notification No.14/2004-ST, namely, "production of goods on behalf of the client" were substituted by the words "production or processing of goods for, or on behalf of the client" w.e.f. 07/06/2005. Another argument advanced by the counsels is that Government of India vide Circular No.143/12/2011-ST dt.26/05/2011 has clarified the position regarding "processing for or on behalf of client, in relation to agricultu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iculture, the some would perforce fall in the negative list of services fully exempted from service tax. They also highlight the clarification 4.4.6 in Education Guide issued by after CBEC after introduction of Negative List, which read as under:- 4.4.6. Would operations like shelling of paddy or cleaning of wheat carried out outside the farm be covered in the negative list entry relating to agriculture as sub-clause (iii) of clause (d) of Section 66D relating to services by way of processes carried out at an agricultural farm? The said sub-clause (iii) also includes 'such like operations which do not alter the essential characteristic of agricultural produce'. Therefore, activities like the processes carried out in agricultural farm would also be covered if the same are performed outside the agricultural farm provided such processes do not alter the essential characteristics of agricultural produce but only make it marketable in the primary market. Therefore, cleaning of wheat would be covered in the negative list entry even if the same is done outside the farm Shelling of paddy would not be covered in the negative list entry relating to agriculture as this process is never ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... packed with a fully computerised packing system. The final product is packed by a fully computerised automatic press into cartons for sale. Lastly, he also justified the demands confirmed in respect of GTA & Renting of Immovable Property services. 5.1 We heard both parties at length and perused the records. 5.2 It is seen that as per Notification No.14/2004-ST, BAS in respect of inter alia, "production of goods on behalf of client". inter alia relation to agriculture" is exempted from service tax liability. This exemption got further broadbanded vide Notification No.19/2005 dt. 07/06/2005 as a result of which such BAS in respect of "production of processing of goods for, or on behalf of the client" was exempted. Board's circular No.143/12/2011 had, in the wake of representations, clarified that the process of threshing and drying of tobacco undertaken for, or on behalf of the clients by the processing units are covered by the expression "processing of goods for, or on behalf of, the client... and provided in relation to agriculture ...." appearing in the Notification No.14/2004-ST (as amended) dated 10-09-2004. We further note that product of agriculture has been denied by the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrol and pre-shipment inspection. 5.4 In view of the above, we are of the view that the activity of the assessees is in relation to the agriculture and not subject to service tax as a business Auxiliary Service even before or after the negative list was issued on 01/07/2012. Hence, we find no merit in the impugned orders where the said activity of threshing and redrying was brought under BAS. On this issue, the concerned assessee-appellants will get the relief. By implication, department's appeals against the relevant impugned orders which have set aside demands made by original authority on BAS will require to be dismissed. 6.1 The next issue is regarding the GTA service. The assessee-appellants have brought the tobacco bundles from the auction platform to their factories. The dispute arose when the goods are brought for the buyers, customers and assessees are doing job work. Learned counsels submit that the assessees are Goods Transport Operators (GTO) and not GTA. They have relied upon the ratios in the cases of South Eastern Coal Fields Ltd. Vs. CCE, Raipur [2016(41) STR 636 (Tri. Del)] and Nandganj Sihori Sugar Co. Ltd. Vs. CCE, Lucknow [2014(34) STR 850 (Tri. Del.)]. Learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Authority appears to have rightly the understood the matter in controversy, there is no quarrel on the consignment note to give any interim relief to the Appellant. Consignment not may not necessarily be in any format since no such format is prescribed under law but the documents accompanying the goods identifying the consignor and consignee, route of consignment enable to construe what a consignment note is and the Appellant's grievance that the consignment note was mandatory does not find support of law when fact and circumstances demonstrate route of goods moved disclosing identity of consignor and consignee and goods consigned." Hence, we find no reason to interfere with the orders where service tax has been demanded under GTA. The same is sustained. On this point, the concerned appeals are dismissed. 7.1 The next issue is regarding the renting of immovable property for commercial purpose. Department has demanded the service tax under sub-section (105) (zzzz) of Section 65 Finance Act, 1994 w.e.f. 01/06/2007 under the head of "renting of immovable property services". No service tax has been paid by the appellant. 7.2 easy reference the "taxable service" as defined in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration only on the issue of penalties on tax demands in respect of GTA and renting of Immovable Property and commission paid to foreign agents, whether at all leviable in the facts and circumstances of each of these case, and if imposable, the quantum thereof in accordance with law. Needless to say, the respective authorities in de-novo will afford reasonable opportunity to the appellants to put forth their case. Additional evidences may also be admitted under law. 10. In the result, all the appeals are partly allowed and partly remanded as stated below :- (i) Demands of service tax on Business Auxiliary Service are set aside (in appeal Nos.ST/341/2011, ST/2026/2012, ST/20578/2014, ST/20101/2013, ST/20789/2014, ST/28252/2013, ST/30498/2016, ST/2075/2012, ST/663/2011, ST/30682/2016, ST/450/2012, ST/337/2012, ST/20784/2015, ST/23610/2014, ST/449/2012, ST/30365/2016, ST/25324/2013, ST/23403/2014, ST/26434/2013, ST/21524/2015, ST/30499/2016, ST/23522/2014, ST/23468/2014, ST/2025/2012, ST/1941/2012, ST/1940/2012, ST/2086/2012, ST/2144/2012, ST/25730/2013, ST/410/2011, ST/26978/2013, ST/30368/2016, ST/26433/2013, ST/2164/2012, ST/2163/2012, ST/491/2011 & ST/1/2011) and appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X
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