TaxTMI 
TaxTMI 
2017 (5) TMI 518
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.... ST/20482/2014 Shri S. Sankaravadivelu, Advocate for the appellants in appeal Nos.ST/1940/2012, ST/449/2012, ST/30365/2016, ST/25324/2013, ST/23403/2014, ST/1/2011, ST/28427/2013, ST/20383/2014, ST/1121/2012, ST/2798/2012, ST/450/2012, ST/2365/2012, And ST/27967/2013 Shri G. Prahlad, Advocate for the appellant in appeal No.ST/2075/2012. Shri P.R.V. Ramanan, Special Counsel for the Revenue as respondents and appellant. ORDER [Order per: (Dr) Satish Chandra] The issues involved in these appeals pertain to the demand of service tax on Business Auxiliary Service (BAS), Goods Transport Service (GTA service) end Renting of Immovable Property Service. Hence, all the appeals involving technical issues are disposed by this common order. 2. The issues involved in each of these appeals the disputed tax amounts involved/confirmed/set aside in impugned orders in each case is tabulated as under : S. No. Appeals No. Appellant Name Amount involved in BAS (Rs.) Amount involved in GTA (Rs.) Amount involved in Renting of immovable property (Rs.) 1. ST/341/ 2011 M.L. Agro Products Ltd. 8,66,65,781/- 5,23,412/- N/A 2. ST/2026/ 2012 Allia....
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....ndia Tobacco Traders N/A 4,77,856/- N/A 26. ST/27967/ 2013 Indian Tobacco Traders N/A 2,34,610/- N/A 27. ST/21524/ 2015 M.L. Agro Products Ltd. 1,90,44,152/- 1,82,573/- N/A 28. ST/30499/ 2016 Maddi Lakshmaiah & Co. Ltd. 1,12,79,465/- 1,97,604/- N/A 29. ST/23522/ 2014 Alliance One Industries (P) Ltd. 1,93,33,493/- 10,28,569/- N/A 30. ST/23768/ 2014 Maddi Lakshmaiah & Co. Ltd. 1,21,14,056/- 37,414/- N/A 31. ST/2025/ 2012 Alliance One Industries India (P) Ltd. 1,19,19,903/- 2,20,133/- N/A 32. ST/1941/ 2012 M.L. Agro Products (P) Ltd. 1,54,01,904/- 37,808/- N/A 33. ST/1940/ 2012 Mahi Agro Products (P) Ltd. 1,87,80,431/- N/A N/A 34. ST/21015/ 2014 CCE, C. & S.T., GUNTUR 47,00,458/- Set aside by OIA N/A N/A 35. ST/2086/ 2012 Polisetty Soma-sundaram 1,00,32,862/- 1,75,350/- N/A 36. ST/2144/ 2012 DTE Exports (P) Ltd. 95,62,717/- 1,27,593/- 6,180/- 37. ST/25730/ 2013 Maddi Lakshmaiah & Co. Ltd. 8,72,19,315/- 9,22,321/- 5,68,95,322/- 38. ST/410/ 2011 Alliance On....
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....ed this activity as BAS and brought the assessees to the service tax net on this score. Being aggrieved, the assessees have filed the appeals. 3.2 Demands oi service tax hove also been made on some assessees in respect of tax liability on services of GTA and Renting of Immovable Property and in one case commission paid to foreign agent. Being aggrieved, the assessees concerned have preferred appeals as listed in the table under pare-2 above. 3.3. In seven cases (Sl.Nos.5, 9, 11, 34, 42, 46 and 47 of the table under pera-2 above) the department has filed appeals against order of lower authority setting aside the demands of service tax on BAS. In one case (Sl.No. 16 of table), department is in appeal on non-imposition of penalities by adjudicating authority. 3.4 With this background, we heard Shri Y. Sreenivasa Reddy, Shri Ch. Venkateshwara Rao, Shri S. Sankaravadivelu and Shri G. Prahlad, learned advocates for the assessees. The submissions of these counsels can be summarised as under : (i) Department has wrongly demanded service tax liability under BAS, which was introduced w.e.f. 01/07/2006 under S65(19) of the Finance Act, 1994. They submit that as per Notification No....
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.... 01/07/2012, the negative list have been introduced by the Ministry of Finance, but the Department wrongly acted to bring the impugned activities under service tax net even after 01/07/2012. 4.1 Learned counsels have drawn our attention to Notification NO.25/202-ST dt. 20/06/2012 which lists the taxable services exempted from the whole of the service tax leviable under Section 66B of the Finance Act, 1994. Under item No.30 of the list is included: "Carrying out an intermediate production process as job work in relation to: (a) agriculture, printing or textile processing". Learned counsels submit that as the activity in question has been confirmed as one relating to agriculture, the some would perforce fall in the negative list of services fully exempted from service tax. They also highlight the clarification 4.4.6 in Education Guide issued by after CBEC after introduction of Negative List, which read as under:- 4.4.6. Would operations like shelling of paddy or cleaning of wheat carried out outside the farm be covered in the negative list entry relating to agriculture as sub-clause (iii) of clause (d) of Section 66D relating to services by way of processes carried out at an ag....
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....' requirements regarding colour, layer, smell etc. subsequently, tobacco is threshed and re-dried in their redrying factory at the fixed levels to give the requisite moisture at required stage for retaining storage capacity before it reaches the customers. Apart from the above, tobacco is also threshed either with stem or without stem as per the specifications of the customers. The tobacco processing also includes quality assurance control with the help of latest generation equipment to suit all international tobacco buyers' requirements. In addition to above, chemical analysis of tobacco is performed on Auto analyzer backed by manual filtrations using various chemicals, tobacco will be packed with a fully computerised packing system. The final product is packed by a fully computerised automatic press into cartons for sale. Lastly, he also justified the demands confirmed in respect of GTA & Renting of Immovable Property services. 5.1 We heard both parties at length and perused the records. 5.2 It is seen that as per Notification No.14/2004-ST, BAS in respect of inter alia, "production of goods on behalf of client". inter alia relation to agriculture" is exempted from service ....
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....for facilitation exports. The certification is done only after removing unwanted / not useful material from the tobacco leaf as per the standard specifications. Here the product form will not change. Only the shape of the leaf will change. There are not chemical changes involved. The product will stabilize after threshing and the shelf life of tobacco will increase. In the absence of these processes the object of Virginia tobacco cultivation will remain incomplete and gets defeated. After threshing also the tobacco is still called as unmanufactured tobacco only. Therefore the entire threshing operation can be technically called Post Harvest operation of Virginia tobacco cultivation for quality control and pre-shipment inspection. 5.4 In view of the above, we are of the view that the activity of the assessees is in relation to the agriculture and not subject to service tax as a business Auxiliary Service even before or after the negative list was issued on 01/07/2012. Hence, we find no merit in the impugned orders where the said activity of threshing and redrying was brought under BAS. On this issue, the concerned assessee-appellants will get the relief. By implication, departmen....
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.... and load have been described. In the instant cases, the assessees are the service recipients for which they are paying the freight charges. When it is so, then we are of the view that the Department has rightly applied GTA and demanded the service tax for the reason that without an accompanying paper/document, goods cannot be received without which is the basis of amount for payment. This is also the view taken by the Tribunal in UP State Sugar Corporation Vs. CCE, Meerut-II [2011(24) STR 423 (Tri.-Del.). It would be worthy of reproducing relevant portion of the Tribunal's finding herein below : "4. Ld. DR, on the other hand, supports the order of the authorities below. When we find that the first Appellate Authority appears to have rightly the understood the matter in controversy, there is no quarrel on the consignment note to give any interim relief to the Appellant. Consignment not may not necessarily be in any format since no such format is prescribed under law but the documents accompanying the goods identifying the consignor and consignee, route of consignment enable to construe what a consignment note is and the Appellant's grievance that the consignment note was mandato....
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....assessee under reverse charge mechanism in terms of Rule 2 (1) (d) (iv) of the Service Tax Rules. When this is so, this demand is upheld and appeal on the issue is dismissed. 9.1 In a few cases, the leaned counsel submits that the service tax was already paid along with interest so no question of imposing of penalty has arisen. 9.2 It may be mentioned that in the case of Sethi Tools Pvt. Ltd. Vs. CCE, CC &ST, Vadodara-II [2015(40) STR 280 (Tri. - Ahmd.)], the Ahmedabad Tribunal has observed that if the service tax is paid within the period of 6 months, then penalty was not leviable under Section 80(2) of Finance Act, 1994 which was introduced by the budget of 2012. In this background, we remand all these cases for de novo consideration only on the issue of penalties on tax demands in respect of GTA and renting of Immovable Property and commission paid to foreign agents, whether at all leviable in the facts and circumstances of each of these case, and if imposable, the quantum thereof in accordance with law. Needless to say, the respective authorities in de-novo will afford reasonable opportunity to the appellants to put forth their case. Additional evidences may also be admit....