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TMI Blog2023 (4) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... ies and the processes involved in each are very different and demand do not sustain. Further, Learned Advocate has drawn our attention to M/s. Attur Agricultural Producers Co-operative Marketing Society Ltd. Vs. CCE, Salem, [ 2019 (8) TMI 262 - CESTAT CHENNAI ] wherein it has been held This is not service rendered to anybody at all. It is true that, in turn, the appellant has been borrowing money from their bank but it does not mean that the appellant is supporting service of the bank. They are borrowing money from the bank on their account and in turn lending it to their members. In view of the above, we find that demands on both these counts are not sustainable and need to be set aside. The facts in these two appeals are identical. The marketing and other services rendered by the appellant to their farmer members in selling their agricultural produce through tender process would not be coming under Auctioneer s Service under Section 65 (105)(zzzr) of the Finance Act, 1994 - demand do not sustain. Business Support Services - appellants are taking loans from M/s. Salem District Central Co-operative Finance Bank and utilizing this money in providing jewel loans to thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not - HELD THAT:- The appellants have put forth that no malafide can be attributed to evade payment of service tax and non-payment of service tax was due to the bonafide belief and there was no deliberate intention for not paying tax and it is the responsibility of the Revenue to discharge the burden that the appellants have deliberately omitted to pay tax. GTA service was introduced w.e.f. January 2005 and the understanding was that individual truck owners engaged would not fall under GTA service - The appellants had mostly undertaken carrying food and other items as part of PDS. So it cannot be said that appellant has wilfully suppressed any facts and so demand in respect of GTA invoking extended period cannot be sustained. As such, penalties imposed under Sections 77 78 of the Finance Act, 1994 are not warranted. Thus, the demands confirmed against the appellant under Auctioneer s Service and Business Support Service are not justified. Consequently, demand of interest and imposition of penalties are also set aside - However, demand of service tax in respect of GTA Service provided is confirmed for the normal period which needs to be computed after according the benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Demand No. 4/2013 dated 03.04.2013 had followed on similar charges demanding service tax of Rs. 7,11,066/- under Auctioneer s service and BSS along with interest and also proposing penal action for non-payment of tax and for contravention of various provisions of the Finance Act, 1994, for the period from April, 2011 to June, 2012. After due process of law, these were adjudicated confirming the demand of tax plus interest and imposing penalties vide OIO No. 31/2012-ST dated 28.09.2012 and OIO No. 31/2012-ST dated 28.04.2014. On filing appeals to the Commissioner (Appeals), Salem, impugned Order-in-Appeal No. 61/2013-ST dated 23.03.2013 and OIA No. 187/2014-ST dated 08.10.2014 came to be passed rejecting the appeals and hence the appellants came before this forum. 1.3 The substance of allegations in these notices is that the appellants who are a registered co-operative society is providing Auctioneer s service under 65(105)(zzzr) of the Finance Act, 1994 by marketing the agricultural produce of its farmer members by arranging facilities like space, storage, auction yard, prefixing auction prices of the goods and conducting auction duly managed by its personnel. By arranging jew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges and final disbursement amount are entered. The society is providing facilities like advertisement through different media, short term storage in the open yard and providing clean and safe auction yard and fixing pre-auction sale prices for various commodities. As far as the demand in respect of the Auctioneer service is concerned, the learned Advocate has submitted that the taxability is there only on auctioning service and not on tendering service. The services rendered by the appellant in facilitation of sale of agricultural produce of its members through sealed tenders are not classifiable under Auctioneer s Service according to her. 2.3 Learned Advocate also submitted that the traders and the bidders had to mention their prices only in a secret tender form. The other prospective bidders will not be knowing the bids made by the other bidders. Under the tender system, the bidders have made only one bid and the tendering process gets completed at the end of the appointed time and date and the bids received up to a particular cut-off period are only considered. The most important distinctive principle differentiating an auction from a tender is that, in an auction, al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BSS, Learned Advocate has contended that the society provides gold loans against jewels pledged by the farmer members. At the time of sanctioning of loans, appraising charges of 3% on the amount of loan sanctioned subject to a maximum of Rs. 100/- per loan as per the direction given by M/s. Salem District Central Co-operative Finance Bank is collected. Appellants are getting loans from the bank and lending money to their members on interest. Therefore, she has asserted that this is the service rendered to themselves and not to the bank and they are not rendering any service to support the business of M/s. Salem District Central Co-operative Finance Bank. For lending money, they are collecting interest and for appraising the value of the jewels brought by the farmer members, appraising charges of 3% subject to maximum of 100/- per loan are collected. It is argued that the service rendered in giving jewel loans to the farmers is not classifiable under BSS. 2.5 On the issue of demand of service tax under GTA services, learned Advocate has put forth that the assessee who were liable to pay service under reverse charge as per Rule 2(1)(d)(v) of the Service Tax Rules, 1994 (STR, 1994 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the records as available in these appeals. 5.1 The main issue which requires consideration in the instant case is as to whether the appellants are rendering Auctioneer s Service in respect of marketing and other services rendered for selling agricultural produce of its farmer members? The other issues are demand of service tax under BSS and GTA services. Regarding the taxability of appellant s services under Auctioneer s Service , a numerous judicial decisions have already gone into the differences between Auction and Tender. The Tribunal in M/s. The Salem Starch Sago Manufacturers Service Industrial Co-operative Society Ltd. Vs. CCE ST, Salem reported in 2018 (3) TMI 192-Cestat Chennai, has analysed the differences between auction and tender as under:- 5.7 A number of judicial decisions have also gone into the difference between auction and tender :- (i) Auction Vs. Inviting Tenders:- Former is a way of selling property by bids usually to the highest bidder by public competition. Latter is merely an attempt to ascertain whether an offer can be obtained within adoptable margin. It is an offer to receive offers, an offer to chaffer: 1974 SC 651-6. (ii) Auc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus clear that an auction is held by public competition wherein every bidder has right to raise his own bid. It is also clear that in public auction, the atmosphere therein created by open bidding can tempt the bidder to raise his bid and thus enhanced price can be fetched by the said mode. 19. In a sale by tender, however, no such opportunity is available to the tenderer. Once he gives his offer that is final and cannot be raised, whereas in public auction each bidder knows the bid of the other person. In the mode of sale by calling for offers or tenders, none of the persons or tenders know the price offered by the other. In regard to the tenders, it is observed in Halsbury s Laws of England, Volume 9, and Fourth Edition para 230 on page 101 that an advertisement that goods or services are to be bought or sold by tenders, is not prima facie, an offer to sell to the person making the highest tender . It is, therefore, clear that by sale by tender or by calling for offers, the highest bid need not be accepted. 20. There is thus a substantial distinction between the sale by calling for offers through advertisement and the sale by public auction. By no stretch of imagination a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 65 (105)(zzzr) of the Finance Act, 1994. 5.2 On the issue of BSS, the facts indicate that the appellants are taking loans from M/s. Salem District Central Co-operative Finance Bank and utilizing this money in providing jewel loans to their farmer members. Thus, the appellant is borrowing the money from the bank on its account and in turn lending it to their farmer members on interest. The services rendered by the appellant are relatable only to its members and not to the bank and the charges collected for appraising jewels before sanctioning of loans are in the nature of cost incurred by the appellant for sanctioning of loans. As such, there is no BSS rendered in the instant case. As such, we hold that the demands raised under the impugned orders demanding service tax under Auctioneer Service and BAS are not maintainable. 5.3 Regarding non-payment of service tax on transport of goods by road, the appellants have undertaken the work of lifting and delivering of goods to the ration shops under the Public Distribution System. The service is covered under GTA and in terms of Rule 2(1)(d)(v) of STR, 1994, read with Notification No. 36/2004-ST dated 31.12.2004, the liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X
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