2017 (2) TMI 1393 - AT - Service Tax

Tribunal Grants Appeal on Service Tax for Milk Chilling Activities

SHRIJI ICE FACTORY Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II

The Tribunal allowed both appeals, setting aside the lower authorities' decision to demand service tax under 'Business Support Services.' The appellant's ... Business Support Services - cold storage services for chilling plant to M/s. Udaipur Dugdh Utpadak Sehkari Sangh Limited, Udaipur for chilling of milk - agricultural produce or not? - exempt from tax or not - Held that:- The milk comes under the category of “agricultural produce”. The appellant is not processing/treating/trading the milk. It is just chilling the milk which was later supplied to the consumer. It is evident that the storage of agricultural produce is exempted from the service tax - In the instant case, the appellant is providing chilling of milk and certainly, not processing/trading of milk and do not come under the head storage and warehousing services. Appeal allowed - decided in favor of appellant. Issues:- Appeal against Order-in-Appeal No. 133-134(CB) ST/JPR-II/2011- Classification of services under 'Business Support Services'- Exemption for storage of agricultural produce- Applicability of Section 65(102) of the Finance Act, 1994Analysis:The judgment pertains to an appeal against Order-in-Appeal No. 133-134(CB) ST/JPR-II/2011, concerning the classification of services provided by the appellant. The appellant, engaged in providing cold storage services for chilling plant to a specific entity, was deemed by lower authorities to be offering services falling under 'Business Support Services.' The crux of the issue revolved around whether the appellant's activities constituted processing or trading of milk, or merely chilling the agricultural produce.Upon thorough examination, the Tribunal noted that the appellant's actions primarily involved chilling milk, which was subsequently supplied to consumers. Reference was made to Section 65(102) of the Finance Act, 1994, which exempts the storage of agricultural produce from service tax. The Tribunal highlighted that the appellant's activities did not involve processing or trading of milk, but solely the chilling process. Consequently, the Tribunal concluded that the appellant's case fell within the exemption provided for the storage of agricultural produce.Ultimately, the Tribunal found no merit in the lower authorities' decision to demand service tax under 'Business Support Services' and set aside the impugned order. Both appeals filed by the appellant were allowed, emphasizing the applicability of the exemption for the storage of agricultural produce in the context of the appellant's activities. The judgment, delivered by Dr. Satish Chandra, President, and Shri Ashok K. Arya, Member (T), provided a clear and concise analysis based on the relevant legal provisions and factual circumstances presented during the proceedings.