TaxTMI 
TaxTMI 
2017 (2) TMI 1355
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....ment. ORDER [Order per : Justice Satish Chandra (President)]. - The issues involved in these appeals pertain to the demand of service tax on Business Auxiliary Service (BAS), Goods Transport Service (GTA service) and Renting of Immovable Property Service. Hence, all the appeals involving identical 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 the 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 Alliance one Industries India (P) Ltd. 3,57,50,467/- 6,25,190/- N/A 3. ST/20446/ 2014 Premier Tobacco Packers (P) Ltd. N/A 76,301/- Rs. 51,152/- 4. ST/20578/ 2014 Premier Tobacco Packers (P) Ltd. 6,67,16,981/- N/A N/A 5. ST/28327/ 2013 C.C., C.E. & S.T. -GUNTUR 19,14,667/- Set aside by OIA Rs. 55,211/- upheld Rs. 6,180/- upheld 6. ST/26101/ 2013 Premier Tobacco Packers (P) Ltd. 1,65,09,143/- N/A N/A 7. ST/20....
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....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 One Industries India (P) Ltd. 3,62,23,558/- 26,49,904/- N/A 39. ST/26978/ 2013 Premier Tobacco Packers (P) Ltd. 57,32,393/- 2,02,907/- 1,91,821/- 40. ST/30368/ 2016 Alliance One Industries (P) Ltd. 2,05,50,911/- 9,48,151/- N/A 41. ST/27968/ 2013 Indian Tobacco Traders N/A 49,145/- N/A 42. ST/2798/ 2012 C.C., C.E. & S.T. GUNTUR 4,70,604/- Set aside by OIA N/A N/A 43. ST/26433/ 2013 M.L. Agro Products (P) Ltd. 1,92,57,626/- 52,030/- N/A 44. ST/2164/ 2012 Premier Tobacco Packers (P) Ltd. 91,24,002/- 1,23,398/- 10,506/- 45. ST/2163/ 2012 Premier Tobacco (P) Ltd. 1,17,84,314/- N/A N/A 46. ST/28427/ 2013 C.C., C.E. & S.T. GUNTUR 3,62,234/- Set aside by OIA N/A N/A 47. ST/21758/ 2014 C.C., C.E. & S.T. GUNTUR 29,24,928/- Set aside by OIA N/A N/A 48. ST/491/ 2011 Polisetty Soma-sundaram Tobacco Threshers 7,16,....
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....n be summarised as under : (i) Department has wrongly demanded service tax liability under BAS, which was introduced w.e.f. 1-7-2006 under S. 65(19) of the Finance Act, 1994. They submit that as per Notification No. 14/2004, dated 10-9-2004, they are exempted from tax liability on BAS for the reason that their services are "in relation to agriculture". Further they submit that as per the Notification No. 19/2005-S.T., dated 7-6-2005, the words in clause (b) of Notification No. 14/2004-S.T., namely, "production of goods on behalf of the client" were substituted by the words "production or processing of goods for, or on behalf of the client" w.e.f. 7-6-2005. Another argument advanced by the counsels is that Government of India vide Circular No. 143/12/2011-S.T., dated 26-5-2011 has clarified the position regarding "processing for or on behalf of client, in relation to agriculture". Relevant paras of the Circular are reproduced under :- Representations have been received that client processing of tobacco involving threshing and drying of tobacco leaves and client processing of raw cashew involving roasting/drying, shelling and peeling of raw cashew to recover kernel, are....
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....ike 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 agricultural farm? The said sub-clause (iii) also includes 'such like operations which do not alter the essential characteristic of agricultural produce'. Therefore, activities like the processes carried out in agricultural farm would also be covered if the same are performed outside the agricultural farm provided such processes do not alter the essential characteristics of agricultural produce but only make it marketable in the primary market. Therefore, cleaning of wheat would be covered in the negative list entry even if the same is done outside the farm. Shelling of paddy would not be covered in the negative list entry relating to agriculture as this process is never done on a farm but in a rice sheller normally located away from the farm. However, if shelling is done by way of a service i.e. on job work then the same would be covered under the exemption relating to 'carrying out of intermediate production process as job work in relation ....
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....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-S.T., BAS in respect of inter alia, "production of goods on behalf of client", inter alia "in relation to agriculture" is exempted from service tax liability. This exemption got further broadbanded vide Notification No. 19/2005, dated 7-6-2005 as a result of which such BAS in respect of "production of processing of goods for; or on behalf of the client" was exempted. Board's Circular No. 143/12/2011 had, in the wake of representations, clarified that the process of threshing and drying of tobacco undertaken for, or on behalf of the clients by the processing units are covered by the expression "processing of goods for, or on behalf of, the client.... and provided in relation to agriculture......" appearing, in the Notification No. 14/2004-S.T. (as amended) dated 10-9-2004. We further note that product of agriculture has been defined by the Hon'ble Supreme Court in the case of CIT v. Cynamid India Ltd. (supra). Here, dictionary meaning of 'agricultural product' was also discussed. Accordingly....
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.... agriculture and not subject to service tax as a Business Auxiliary Service even before or after the negative list was issued on 1-7-2012. Hence, we find no merits 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, Department's appeals against the relevant impugned orders which have set aside demands made by original authorities on BAS will require to be dismissed. 6.1 The next issue is regarding the GTA service. The assessee-appellants have brought the tobacco bundles from the auction platform to their factories. The dispute arose when the goods are brought for the buyers/customers and assessees are doing job work. Learned counsels submit that the assessees are Goods Transport Operators (GTO) and not GTA. They have relied upon the ratios in the cases of South Eastern Coal Fields Ltd. v. CCE, Raipur [2016 (41) S.T.R. 636 (Tri.-Del.)]; and Nandganj Sihori Sugar Co. Ltd. v. CCE, Lucknow [2014 (34) S.T.R. 850 (Tri.-Del.)]. Learned counsels also submit that the assessees engaged private truck operators for transportation of tobacco and they paid freig....
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.... quarrel on the consignment note to give any interim relief to the appellant. Consignment note 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 mandatory does not find support of law when fact and circumstances demonstrate route of goods moved disclosing identity of consignor and consignee and goods consigned." Hence, we find no reason to interfere with the orders where service tax has been demanded under GTA. The same is sustained. On this point, the concerned appeals are dismissed. 7.1 The next issue is regarding the renting of immovable property for commercial purpose. Department has demanded the service tax under sub-section (105)(zzzz) of Section 65 of Finance Act, 1994 w.e.f. 1-6-2007 under the head of "renting of immovable property services". No service tax has been paid by the appellant. 7.2 For easy reference the "taxable service" as defined in sub-section (105)(zzzz) of Section 65 of the Finance Act, as substituted vide F....
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.... 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 cases, 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 admitted under law. 10. In the result, all the appeals are partly allowed and partly remanded as stated below :- (i) Demands of service tax on Business Auxiliary Service are set aside (in Appeal Nos. ST/341/2011, ST/2026/2012, ST/20578/2014, ST/26101/2013, ST/20789/2014, ST/28252/2013, ST/30498/2016, ST/2075/2012, ST/663/2011, ST/30682/2016, ST/450/2012, ST/3337/2012, ST/20734/2015, ST/23610/2014, ST/449/2012, ST/30365/2016, ST/25324/2013, ST/23403/2014, ST/26434/2013, ST/21524/2015, ST/30499/2016, ST/23522/2014, ST/23768/2014, ST/2025/2012, ST/1941/2012, ST/1940/2012, ST/2086/2012, ST/2144/2012, ST/25730/2013, ST/410/2011, ST/26978/2013, ST/30368/2016, ST/26433/2013, ST/2164/2012, ST/2163/2012, ST/491/2011 & ST/1....