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TMI Blog2017 (2) TMI 1355X X X X Extracts X X X X X X X X Extracts X X X X ..... he negative list was issued on 1-7-2012 - there are no merits in the impugned orders where the said activity of threshing and redrying was brought under BAS - demand set aside. GTA Service - assessee-appellants have brought the tobacco bundles from the auction platform to their factories - main plea of the assessees on this issue is that no consignment notes have been raised - Held that:- Consignment notes can be issued in any form, as seen from definition of GTA in Section 65(50)(b) of the Finance Act, 1994 - In the instant cases, the assessees are the service recipients for which they are paying the freight charges. When it is so, then we are of the view that the Department has rightly applied GTA and demanded the service tax for the reason that without an accompanying paper/document, goods cannot be received without which is the basis of amount for payment - demand under GTA Service upheld. Renting of immovable property for commercial purpose - Department has demanded the service tax under sub-section (105)(zzzz) of Section 65 of Finance Act, 1994 w.e.f. 1-6-2007 under the head of “renting of immovable property services” - Held that:- It is an undisputed fact that the immovable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) 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/20446/ 2014 Premier Tobacco Packers (P) Ltd. N/A 76,301/- ₹ 51,152/- 4. ST/20578/ 2014 Premier Tobacco Packers (P) Ltd. 6,67,16,981/- N/A N/A 5. ST/28327/ 2013 C.C., C.E. & S.T. -GUNTUR 19,14,667/- Set aside by OIA ₹ 55,211/- upheld ₹ 6,180/- upheld 6. ST/26101/ 2013 Premier Tobacco Packers (P) Ltd. 1,65,09,143/- N/A N/A 7. ST/20789/ 2014 Premier Tobacco Packers (P) Ltd. 3,61,12,745/- 22,12,735/- 8,44,804/- 8. ST/28252/ 2013 Premier Tobacco Packers (P) Ltd. 2,68,373/- N/A N/A 9. ST/20482/ 2014 C.C., C.E. & S.T. -GUNTUR 15,81,526/- Set aside by OIA N/A N/A 10. ST/30498/ 2016 M.L. Agro Products Ltd. 1,74,85,869/- 1,24,347/- N/A 11. ST/20383/ 2014 C.C.E., S.T. - GUNTUR 2,85,964/- Set aside by OIA N/A N/A 12. ST/2075/ 2012 Maddi Lakshmaiah & Co Ltd. 1,77,22,102/- 1,13,617/- N/A 13. ST/663/ 2011 DTE Exports (P) Ltd. 4,16,78,396/- 4,48,696/- 5,608/- ₹ 3,23,052/- demand on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Packers (P) Ltd. 91,24,002/- 1,23,398/- 10,506/- 45. ST/2163/ 2012 Premier Tobacco (P) Ltd. 1,17,84,314/- N/A N/A 46. ST/28427/ 2013 C.C., C.E. & S.T. GUNTUR 3,62,234/- Set aside by OIA N/A N/A 47. ST/21758/ 2014 C.C., C.E. & S.T. GUNTUR 29,24,928/- Set aside by OIA N/A N/A 48. ST/491/ 2011 Polisetty Soma-sundaram Tobacco Threshers 7,16,74,980 6,65,035/- N/A 49. ST/01/2011 Mahi Agro Products P. Ltd. 6,43,19,388/- 4,66,028 N/A 3.1 The brief facts of the case are that the appellant-assessee are engaged in threshing and redrying of the tobacco leaves to make the tobacco suitable for manufacture of cigarettes and allied products of tobacco or for export. After harvesting the green leaf tobacco, the farmers cure the green leaf tobacco in their barns. The cured leaves are bundled by the farmers and brought to the Tobacco Board Auction Platforms, where the Tobacco Board (Ministry of Commerce) conducts auctions. The cured lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing of goods for, or on behalf of the client" w.e.f. 7-6-2005. Another argument advanced by the counsels is that Government of India vide Circular No. 143/12/2011-S.T., dated 26-5-2011 has clarified the position regarding "processing for or on behalf of client, in relation to agriculture". Relevant paras of the Circular are reproduced under :- Representations have been received that client processing of tobacco involving threshing and drying of tobacco leaves and client processing of raw cashew involving roasting/drying, shelling and peeling of raw cashew to recover kernel, are considered by the field formations as not falling within the meaning of the expression "in relation to agriculture" appearing in Notification 14/2004-S.T. (as amended) dated 10th September, 2004, resulting in avoidable disputes and litigation. 2. These representations have been examined. In the cases represented, the agricultural produce namely tobacco or raw cashew, which are subject to client processing retains their essential characteristics at the output stage and therefore the processes undertaken on or behalf of client should be considered as covered by the expression 'in relation to agricu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stics 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 done on a farm but in a rice sheller normally located away from the farm. However, if shelling is done by way of a service i.e. on job work then the same would be covered under the exemption relating to 'carrying out of intermediate production process as job work in relation to agriculture'. 4.2 In further support of their submissions, they relied upon the ratio of the following cases :- i. CIT v. Cynamid India Ltd. [AIR 1999 SC 1346] ii. Tasty Bite Eatables Ltd. v. CCE, Pune-II [2016 (41) S.T.R. 117 (Tri.-Mumbai)] Lastly, they made a request that the impugned order may be set aside in regard to demand of service tax on BAS. 4.4 On the other hand, Shri P.R.V. Ramanan, learned Special Counsel for the Revenue while conceding the fact of the said Board's Circular dated 26-5-2011, however sought to justify the demands on BAS and submitted written submissions. He c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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-S.T. (as amended) dated 10-9-2004. We further note that product of agriculture has been defined by the Hon'ble Supreme Court in the case of CIT v. Cynamid India Ltd. (supra). Here, dictionary meaning of 'agricultural product' was also discussed. Accordingly, tobacco and these activities come under the product of agriculture, in the case of Tasty Bite Eatables Ltd. (supra), the issue was regarding the preparation of vegetables, fruits, processing the same packing in consumer packs for their clients. That was not considered as business activity. Relevant Para 5.1 of the Tribunal's decision is reproduced below :- 5.1 The above said clarification would squarely apply in the facts of this case as it is undisputed that appellant is undertaking the processing of vegetables on behalf of their client. It is settled law that revenue officers cannot argue against the board's circular. In the case in hand, the first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. v. CCE, Raipur [2016 (41) S.T.R. 636 (Tri.-Del.)]; and Nandganj Sihori Sugar Co. Ltd. v. CCE, Lucknow [2014 (34) S.T.R. 850 (Tri.-Del.)]. Learned counsels also submit that the assessees engaged private truck operators for transportation of tobacco and they paid freight charges and no consignment note has been issued. It is further submitted that under sub-clause (zzp) of Section 65(105) of the Act, services provided by a 'Goods Transport Agency' are only taxable, that private truck operators are not covered within the meaning of GTA and hence they are not liable to pay any service tax. 6.2 On the other hand, the Special Counsel for the Department submits that Goods Transport Agency means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. The learned Special Counsel also submits that the assesses are not the owners of the goods. They are th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained. 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 of Finance Act, 1994 w.e.f. 1-6-2007 under the head of "renting of immovable property services". No service tax has been paid by the appellant. 7.2 For easy reference the "taxable service" as defined in sub-section (105)(zzzz) of Section 65 of the Finance Act, as substituted vide Finance Act, w.e.f. 1-6-2007 reads as under : (105) "taxable service" means any service provided or to be provided … … … (zzzz) to any person, by any other person in relation to renting of immovable property for use in the course or furtherance of business of commerce. 7.3 After hearing the parties and on perusal of records, it is an undisputed fact that the immovable property in question was given for the purpose of commercial activities. When it is so, then the service tax is leviable. 7.4 We therefore do not find any infirmity in demands on Renting of Immovable Property confirmed in the impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Appeal Nos. ST/341/2011, ST/2026/2012, ST/20578/2014, ST/26101/2013, ST/20789/2014, ST/28252/2013, ST/30498/2016, ST/2075/2012, ST/663/2011, ST/30682/2016, ST/450/2012, ST/3337/2012, ST/20734/2015, 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/23768/2014, 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 on that issue are allowed with consequential relief, if any, as per law. Departmental appeals against impugned orders setting aside demands on Business Auxiliary Service (Appeal Nos. ST/28327/2013, ST/20482/2014, ST/20383/2014, ST/21015/2014, ST/2798/2012, ST/28427/2013, ST/21758/2014) are dismissed. In consequence, all penalties imposed in relation to demand on BAS will also extinguish. (iii) Demands of service tax on GTA are upheld [in Appeal Nos. ST/341/2011, ST/2026/2012, ST/20446/2014, ST/20789/2014, ST/30498/2016, ST/2075/2012, ST/663/2011, ST/30682/2016, ST/450/2012, ST/3337/2012, ST/20784/2015, ST/23610/2014, ST/26434/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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