Commission agent services for cashew nuts fall within the agricultural produce exemption under service tax notification.

Commission agent services relating to cashew nuts were treated as exempt from service tax under Notification No. 13/2003-ST because the goods fell within the notification's definition of agricultural produce. The notification covered produce from cultivation or plantation, including nuts, where only limited processing does not alter essential characteristics. A CBEC clarification also stated that cashew nut was covered by the exemption. On that reading, the appellant's commission agency activity for cashew export was within the exempt category, and the service tax demand could not be sustained.

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Issues: Whether the services rendered by the appellant as a commission agent for cashew export were covered by the exemption for sale or purchase of agricultural produce under Notification No. 13/2003-ST dated 20.06.2003.

Analysis: The relevant notification exempted services of a commission agent in relation to sale or purchase of agricultural produce. The definition of agricultural produce included produce resulting from cultivation or plantation, including nuts, where only such processing is done as does not alter the essential characteristics. The clarification issued by the CBEC also stated that cashew nut was covered by the exemption. On a reading of the notification and the clarification, the activity undertaken by the appellant fell within the exempt category.

Conclusion: The exemption applied to the appellant's commission agency services in relation to cashew nuts, and the demand of service tax could not be sustained.

Ratio Decidendi: Where the goods dealt with fall within the definition of agricultural produce in the exemption notification, commission agent services relating to their sale or purchase are exempt from service tax.

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