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TMI Blog2024 (2) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 1077 - CESTAT CHENNAI] , wherein this Bench has observed 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. The statement of demand raised in this case is a combined one for all the three services viz., Auctioneer's Service , Business Support Service and Goods and Transport Agency Service . The amount of Service Tax demanded in each category is not ascertainable from the records and documents available in this appeal. The same is not also ascertainable either from the Statement of Demand No. 8/2013 dated 05.04.2013 or from the Order-in-Original No. 26/2014 JC(ST) dated 30.04.2014. Mandatory penalty under Section 78 of the Finance Act, 1994 - HELD THAT:- Though period involved in this Statement of Demand covering normal period for the reason that the Appellant had failed to submit prescribed half-yearly ST-3 returns. It is opined that imposing penalty under Section 78 of the Finance Act, 1994 is not at all justified in the facts and circumstances of this case and so, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... members of the society. As an agent of the members, to ensure that the agriculturists get a fair price for their products, appellants are providing marketing assistance such as in the nature of secret tender service and marketing the agricultural produce on behalf of the members. For this, the appellants include such of those traders who are interested to buy the agricultural produce and who have got the sales tax Registration Number. For the services rendered by the society for marketing the agricultural produce brought by the members, a commission as service charge is being received as a percentage of the sale proceeds. Similarly a commission as service charge is obtained from the traders for the services offered by the society. Among other activities, the appellants also arrange jewel loans to the members and also undertaking the work of lifting and delivering the goods to the ration shops under the Public Distribution System. 2.3 It is alleged by the Department that the services rendered by the appellants are in the nature of the Auctioneer's Service , Business Support Service and Good Transport Agency Service . As such, a Statement of Demand No. 8/2013 dated 05.04.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vii. Opening of the tender box in the evening by the Marketing Manager of the Society in the presence of Traders and Secretary and after opening the tender box, the traders who quoted the highest price for a particular lot is declared as the highest bidder and the same is displayed in the notice board, lot wise for the convenience of the Farmers. viii. After noticing the price of the goods declared in the notice board, if the farmer is satisfied, he may sell the goods, otherwise he may store the goods for the next sale. ix. After getting concurrence from the farmers for the price offered by the traders to the said lot, the goods are sold to the highest bidder for the said produce. x. On completion of sale, the sale proceeds are disbursed to the members immediately by the appellants, after deducting service charges @2% in respect of cotton, maize and oil seeds and 2.5% for turmeric, as marketing service charges from Riots for the value of the produce sold in secret tender and from the merchants 1% service charges is collected toward their service. xi. For conducting the secret tender, the traders are informed in advance through various media. A tender register is bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onducted related to goods or property belonging to private parties by Government or private person, then same is taxable under the category Auctioneers Service . iii. That exemption is not extended to auction related to agricultural products and auction conducted by charitable institutions operating under non-profit motive and by Government. 5.2 The appellant has submitted that their Auctioneer s Service is exempted in terms of Notification No. 13/2003-ST dated 20.06.2003 as even if they are treated as a commission agent under BAS, Sale or Purchase of Agricultural Produce is exempted from Service Tax leviable under Section 66 of the Finance Act, 1994. 5.3 The goods brought by the members of the society are marketed / sold to the registered traders. Actually, the Society premises are used as a common platform for sale by agriculturist and inspection by the buyers. The goods are sold by adopting different practices such as tender, auction, etc. The so-called auction is also a modus operandi for effecting the sale. A sale is a sale whether it is across the counter as retail sale or through wholesale market or through tender or by auction. By all means, it is only a sale. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s decision in the case of Lakshmi Narayana Mining Co. Vs. Commissioner of Service Tax, Bangalore [2009 (16) STR 691 (Tri.-Bang.)] which has been affirmed by the Karnataka High Court reported in [2012 (26) S.T.R. 517 (Kаr.)], 6.4 It was submitted that since truck Operators/truck owners are not covered under the scheme of subject levy, the present demand is not sustainable. The truck operators do not issue any consignment note as per trade practice. Goods Transport Agency has been defined in the Act as any person who provides the service in relation to transport of goods by road and issues consignment note, by whatever name called . 6.5 The Ld. counsel has further argued that even if impugned service is taxable under the category Goods Transport Agency Service , the demand is not sustainable as the same has been demanded without providing the benefit of abatement to the extent of 75% under Notification No. 1/2006-ST dated 01.03.2006. The Ld. Authority has alleged that the appellants have not produced evidence to claim exemption. It is submitted that the only requirement for claiming exemption under Notification No. 1/2006 is that the assessee should produce declara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Auction Vs. Tender: In an auction, a number of persons attempt to outbid each other; in any system of tenders, though the spirit of outbidding by closed offer is inherent, yet one cannot complete for the 2nd and 3rd time. Moreover, when tender is given, the tenderer gives the bid in documents without kno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 sale by calling for offers through advertisement can be said to be a sale by public auction. By relying upon the decision of this Court in Digambar Tatya Utpat vs. Hari Damodar Utpat (AIR 1927 Bombay 143), it is submitted on behalf of the non-applicant No. 7 that there can be a limited court auct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 liability to pay service tax is on the person who pays the freight where the consignor or consignee of goods is any co-operative society. As such, the appellant is covered under the provisions of Section 65 (50b) of the Finance Act, 1994. The period of dispute in this appeal is from April,2006 to March, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be sustained. As such, penalties imposed under Sections 77 78 of the Finance Act, 1994 are not warranted. 11. The statement of demand raised in this case is a combined one for all the three services viz., Auctioneer's Service , Business Support Service and Goods and Transport Agency Service . The amount of Service Tax demanded in each category is not ascertainable from the records and documents available in this appeal. The same is not also ascertainable either from the Statement of Demand No. 8/2013 dated 05.04.2013 or from the Order-in-Original No. 26/2014 JC(ST) dated 30.04.2014. 12. Further, the Original Adjudicating Authority has imposed mandatory penalty under Section 78 of the Finance Act, 1994, though period involved in this Statement of Demand covering normal period for the reason that the Appellant had failed to submit prescribed half-yearly ST-3 returns. We are of the opinion that imposing penalty under Section 78 of the Finance Act, 1994 is not at all justified in the facts and circumstances of this case and so, we order to set aside the same. 13. On the issue of payment of Service Tax on the GTA services, the Appellant has sought (i) the ben ..... X X X X Extracts X X X X X X X X Extracts X X X X
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