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TMI Blog2023 (12) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... Services Tax Act, 2017 ( hereinafter referred to as the "TNGST Act") and under Central Goods and Services Tax Act, 2017 (hereinafter referred to as "CGST Act") in relation to its business operations in Tamil Nadu. For milling purposes, the petitioner imports wheat from other countries into India through various seaports. The petitioner engaged service providers for clearing the imported wheat from seaports. The services include the activity of loading, unloading, packing, storage or warehousing of the imported wheat and its further clearance to the petitioner's factory. The present dispute is with regard to the contract between the petitioner and the 2nd respondent for provision of the above services. 2.1. The petitioner sought for an Advance Ruling under Section 97 of CGST Act, seeking clarification on whether the services rendered by the 2nd respondent in respect of wheat imported by the petitioner is exempted under S.No.54(e) of the Notification No.12/2017-CT dated 28.06.2017. The application filed by the petitioner was rejected by the Tamil Nadu Authority for Advance Ruling vide Order No.18/AAR/2018 dated 29.10.2018 on the ground of lack of jurisdiction as only a supplier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible for the exemption under the said Notification." (emphasis supplied) 4. Preliminary Objection: Before examining the correctness or otherwise of the Advance Ruling a preliminary objection was raised that the present writ petition filed by the petitioner challenging the order of the Advance Ruling Authority passed on an application filed by the 2nd respondent is not maintainable inasmuch as the petitioner was not a party before the Advance Ruling Authority. On the other hand, it was submitted by the learned counsel for the petitioner that the order of the 1st respondent ruling that the transactions between the petitioner and the 2nd respondent is not entitled to exemption in terms of S.No. 54(e) Notification No.12/2017 results in adverse civil consequences on the petitioner inasmuch as the tax burden would ultimately be passed on to the petitioner by the 2nd Respondent. It was submitted that the writ petition is thus maintainable for the petitioner cannot be left without any remedy to challenge the order of the Advance Ruling Authority when the same results in adverse civil consequences. 5. On considering the submissions of both parties as to the maintainability, this Court f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court under Article 226 where they can do so, and the High Court was in error in not entertaining the later writ petition (No. 183 of 1981) and referring the appellants to a civil suit. Insofar as the earlier writ petition (No. 86 of 1980) is concerned, the High Court ought, for the same reason, to have dealt with the contention of the appellants that ammonium nitrate remained exempt from excise duty by reason of the exemption notification until 21-7-1979, when ammonium nitrate was removed from the purview thereof." ii) M.Amrutham Petroleum Agency v. Additional Deputy Commercial Tax, Puducherry, 2016 VIL 254 MAD: This was a case wherein Bharat Petroleum Corporation Limited and Indian Oil Corporation Limited had appointed dealers in the Union Territory of Puducherry including the writ petitioner namely Amurtham Petroleum Agency. Since the appellant had committed default the appropriate authority under the CST Act refused to issue C Forms resultantly the assessing officer in the State of Tamil Nadu demanded a high rate of tax under the CST Act. Against the above background BPCL and IOCL filed writ petitions inter alia seeking a mandamus to direct the authorities in Puducherry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion "marketable" employed in the definition of "agricultural produce" under Notification No.12/2017. It is settled law that the test for marketability is that it should be capable of being sold and it is not necessary that actual sale must take place. Reliance in this regard was placed on the decision of the Hon'ble Supreme Court in the case of "Indian Cable Co.Ltd., v. CCE [1994] 74 ELT 22 (SC) and CCE v. Karataka Soaps & Detergents Ltd. [2017] 355 ELT 161 (SC)" c. That it is not in dispute even in the impugned order that the imported wheat is capable of being sold as such in the primary market, as contemplated in the definition of "agricultural produce". Having found the above condition being satisfied in respect of the services rendered by the 2nd respondent to the petitioner, the denial of exemption under Serial No.54(e) Notification No.12/2017 is clearly unjustifiable. 7. Case of the respondents: a. That the benefit of the exemption under S.No.54(e) to the Notification No.12/2017 is available only to Services of loading, unloading, packing, storage or warehousing till the products are taken to primary market for disposal and as a corollary any service rendered / exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions as specified otherwise, subject to the relevant conditions as specified in the corresponding entry in column (5) of the said Table, namely: Table S.No. Chapter. Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent) Condition ... ....... ........... ......... ........... 54 Heading 9986 Services relating to cultivation of plants 14 and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce by way of - ..... (e) loading, unloading, packing, storage or warehousing of agricultural produce; .... Nil Nil It may also be relevant to extract the definition of the expression " agricultural produce" in the said notification, which reads as under: "2(d) "agricultural produce" means any produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fiber, fuel raw material or other similar products, on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s meant to be subject to in the hands of the petitioner/ importer. In other words if on applying the definition of "agricultural produce" to the wheat that is imported and if it qualifies as an "agricultural produce", the mere fact that the buyer of "agricultural produce" intended to subject it to various other processes subsequently resulting in conversion of wheat into maida, atta and sooji would not take the services of loading, unloading, packing, storage and warehousing of the "agricultural produce" out of Serial No. 54(e) of the Exemption Notification. The reasoning in the impugned order of the 1st Respondent results in importing a condition as to the use to which the agricultural produce would be subject to in the hands of the service recipient. The above test is wholly alien to decide whether a commodity would fall within the definition of "agricultural produce" contained in the above Notification. The impugned Ruling thus suffers from the vice of arbitrariness inasmuch as it has taken into account aspects/ factors which are irrelevant. 9.2. This Court also finds that the impugned order is flawed inasmuch as it results in adding conditions to exemption notification which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly means that the goods in question in the instant case wheat must be capable of being marketed in the primary market and it is not necessary to show that it is actually marketed. In this regard, it may be relevant to refer to the following judgment in Hindustan Petroleum Corpn. Ltd. v. Union of India, (2001) 10 SCC 157 at page 158 "4...... The question regarding the concept of marketability was considered by this Court in A.P. SEB v. CCE [(1994) 2 SCC 428] and was reiterated in Indian Cable Co. Ltd. v. CCE [(1994) 6 SCC 610] in which after extracting the relevant observations from the former case, the Court proceeded to observe as under: (SCC p. 618, para 13) " 'Marketability' is a decisive test for dutiability. It only means 'saleable', or 'suitable for sale'. It need not be in fact 'marketed'. The article should be capable of being sold or being sold, to consumers in the market, as it is - without anything more." (emphasis supplied) 9.4. The Hon'ble Supreme Court has reiterated the above view on numerous other occasions some of them being as follows: 1. Indian Cable Co. Ltd. vs. Collector C.Ex, Calcutta - 1994 (74) E.L.T.22(SC) 2. Commissioner of C.Ex and ST., Banga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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