2022 (2) TMI 61 - AT - Service Tax

Tribunal rules cooperative society not liable for service tax on agricultural produce auction assistance

M/s. The Mettupalayam Agricultural Producers Co-operative Marketing Society Ltd. Versus Commissioner of GST & Central Excise, Salem

The Tribunal ruled in favor of the appellant, a cooperative society, determining that their activity of assisting in auctioning agricultural produce did ... Levy of Service tax - Auctioneers’ Service - assistance rendered in the aunctioneering of the agricultural produce by their member farmers - HELD THAT:- The assistance rendered by the appellants to their member farmers in auctioning their agricultural produce does not tantamount to rendering any service classifiable under Auctioneers’ Service. The issue is decided in the case of M/S. ATTUR AGRICULTURAL PRODUCERS VERSUS COMMISSIONER OF CENTRAL EXCISE [2019 (8) TMI 262 - CESTAT CHENNAI] where it was held that the appellants are selling goods through tender and NOT through auctions. The Auctioneer’s service does not cover the service of tender. Appeal allowed - decided in favor of appellant. Issues:1. Whether the appellant's activity of conducting auctions of agricultural produce constitutes a taxable service under 'Auctioneers' Service' for which service tax is required to be paid.Analysis:Issue 1:The appellant, a cooperative society, conducted auctions of agricultural produce, and the revenue claimed it to be a taxable service under 'Auctioneers' Service,' demanding a service tax payment of Rs. 10,24,322. The appellant argued that their primary activities involved assisting farmers in various agricultural processes and organizing the sale of agricultural produce through an open tender system. They contended that they merely facilitated the auction, with the actual auction being conducted by the owners of the produce and prospective buyers, and they charged a fixed commission or market fee. The appellant relied on legal definitions of agricultural produce and services related to agriculture, highlighting that prior to July 2012, taxable services excluded those related to agriculture. They also referenced relevant notifications and circulars to support their position.The appellant further argued that the Commissioner erred in considering their activity as a taxable service, citing a Supreme Court case and tribunal decisions to support their claim. They emphasized that a previous decision by the same Bench had ruled in favor of a similar cooperative society in a comparable case. The Authorized Representative for the department reiterated the findings of the original order.After considering the arguments and perusing the records, the Tribunal found that the appellant's assistance in auctioning agricultural produce did not fall under 'Auctioneers' Service.' Citing a previous decision by the same Bench, the Tribunal noted that the appellant sold goods through tender, not auctions, and that the demands made were not sustainable. The Tribunal ruled that the impugned order did not stand in light of the previous decision and concluded that the appellant's assistance in auctioning agricultural produce did not constitute a service classifiable under 'Auctioneers' Service.'Ultimately, the Tribunal allowed the appeal, setting aside the impugned order and providing consequential relief as per the law.This comprehensive analysis of the issues involved in the legal judgment provides a detailed overview of the arguments presented, the legal precedents cited, and the final decision reached by the Tribunal.