Commission agent exemption for sugarcane transport service tax liability not sustained under agricultural products notification

Commission received for transporting sugarcane from farmers' fields to a sugar factory was treated as falling within the exemption available to commission agents dealing with agricultural products under Notification No. 13/2003-S.T. The Tribunal applied an earlier identical factual decision and found no material distinction on the present facts. On that basis, the activity was not subjected to service tax under Business Auxiliary Service, and the demand was not sustained.

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Issues: Whether service tax was payable on the commission received for transporting sugarcane from the farmers' fields to the sugar factory and whether the activity was covered by the exemption for commission agents dealing with agricultural products.

Analysis: The dispute turned on an identical factual matrix already decided by the Tribunal, where commission received for activities connected with sugarcane, an agricultural product, was held to fall within the exemption under Notification No. 13/2003-S.T. dated 20-6-2003. As the appellant was transporting sugarcane from the farmers' fields to the sugar factory and there was no material distinction from the earlier decision, the same reasoning applied and the service tax demand could not be sustained.

Conclusion: The service tax demand was not payable and the appeal succeeded.

Ratio Decidendi: Where commission is received for services connected with agricultural products and the case falls within the exemption for commission agents, service tax liability under Business Auxiliary Service does not arise.

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