TaxTMI 
TaxTMI 
2019 (3) TMI 1010
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....of the cold storage house and therefore provides storage and warehousing facilities to variety of produce termed by them as 'Agricultural produce'. The explanation provided at pt. 4 (vii) of the notification defines agriculture produce as "agricultural produce" means any produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products, on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics hut makes it marketable for primary market. "And If any Product falls under the definition of the agriculture produce, then by virtue of S. No 24 of the notification the activity of storage attracts Nil rate of Duty. 3. The Appellant had submitted a list of various products categorised from Group 'A to Group G and the process done on those agriculture commodities before they come into cold storage in order to seek advance ruling that whether the goods which comes for storage will come under the definition of agricultural produce or not and whether the supply of Cold Sto....
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....remain chargeable to GST. 7. Being aggrieved with the Ruling of the AAR, the Appellant has filed appeal before this Fourm. CASE FOR THE PARTY 8. That the appellant is the owner of the cold storage house and therefore provides storage and warehousing facilities to variety of agriculture produce. The explanation provided at pt. 4 (vii) of the notification defines agriculture produce as :- "agricultural produce" means any produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products, on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market." 9. If any Product falls under the definition of the agriculture produce then by virtue of S.No. 24 of the notification the activity of storage attracts NIL rate of Duty. 10. The appellant is hereby discussing the various products and the process done on those agriculture commodities before they come into cold storage. That at the end, of the appellant it is pertinen....
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....e of the goods covered by Column No. 1 under the definition of agriculture produce which is given in the explanation provided at Pt. No. 4 (vii) of the Notification No. 11/2017 Central tax (Rate) dated 28/06/2017 and hence attracts 'NIL' rate of duty. 2. That the appellant will reproduce the sample of the goods at the time of Hearing, before the Bench to explain the contention. GROUP-B Name of goods Stage at which commodities come for storage and process if any applied by the Farmers/Cultivators/Traders before the products comes for Storage Purpose. Remarks 1. Turmeric (Haldi) 2. Dried Ginger (Sonth) 3. Dates (Khajoor) 4. Dry Dates (Chhuhara) 1. That the goods like Turmeric, Ginger, Dates Dry Dates which are undoubtedly an agriculture produce but in order to make them marketable both the cultivator or the farmer undertakes the process of preserving by way of polishing or drying of the product which doesn't change the essential character of the products in question but makes it sustainable & marketable. The traders buy these goods and make them available for cold storage. Thus, products which are stored are an agriculture produce. 2. It is also pe....
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....table at the end of the farmers. The cultivators bring these goods in a dry/ cut form to the Mandis and thereafter goods are bought by the traders in the same form and shape as it is bought by the farmers to the Mandi. The traders who bought the goods don't process it any further before bringing the goods for storing the goods at cold storage. Thus, the product in questions retains it essential character as agriculture produce. 1. That as per the description provided in Column No. 2 there is a clear cut storage of the agriculture produce and the appellant seeks the advance ruling over the coverage of the goods covered by Column No. 1 under the definition of agriculture produce which is given in the explanation provided at Pt. No. 4 (vii) of the Notification No. 11/2017-Central tax (Rate) dated 28/06/2017 and hence attracts 'NIL' rate of duty. 2. That the appellant will reproduce the sample of the goods at the time of hearing before the Bench to explain the contention. Group-E Name of goods Stage at which commodities come for storage and process if any applied by the Farmers/Cultivators/Trader s before the products comes for Storage Purpose. Remarks 1. Cin....
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....at as per the description provided in Column No. 2 there is a clear cut storage of the agriculture produce and the appellant seeks the advance ruling over the coverage of the goods covered by Column No. 1 under the definition of agriculture produce which is given in the 2. explanation provided at Pt. No. 4 (vii) of the Notification No. 11/2017 Central tax (Rate) dated 28/06/2017 and hence attracts 'NIL' rate of duty. 2. That the appellant will reproduce the sample of the goods at the time of Hearing, before the Bench to explain the contention. Group-G Name of goods Stage at which commodities come for storage and process if any applied by the Farmers before the products comes for Storage Purpose. Remarks 1. Dry fruits such as Fig (Anjeer), Almond (Badaam), Walnuts (Akhrot), Pistachio (Pista), Lotus Seeds Pop (Phool Makhana) etc. The product in a question is product with outer shell which has no use. So, removal of outer shell either at the hands of cultivator or at the hands of the trader will never bring any change in its essential character or marketability of the product. The goods are always stored in its form without any processing ever done right from the ....
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.... trader before goods are taken to cold storage like "tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market". That the activities narrated above were also exempted under Section 66D of the Finance Act 1994 and also clarified at the education guide of Service Tax Reference is made to the point 4.4.6 of the Education guide(as reproduced at below paragraphs). Also the same position stands in GST regime and Identical Process on agricultural produce are enjoying the "Nil" Rate of duty. 15. That the reliance placed at para 8.3 upon Circular No. 16/16/2017 GST dated 15/11/17 is misplaced as the issue covered by circular is only in relation to processed tea, processed coffee beans, processed pulses and processed dry fruits. The Board Circular had not clarified in general or had not covered the products discussed in the present application. Discussion made in Board circular are of the process which changes the nature of the agriculture produce but process....
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....ro machinery or vacant land with or without a structure incidental to its use; (e) loading, unloading, packing, storage or warehousing of agricultural produce; (f) agricultural extension services; (g) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce. (ii) Services by way of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling of fruits and vegetables which do not change or alter the essential characteristics of the said fruits or vegetables. (iii) Carrying out an intermediate production process as job work in relation to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce. Further definition of agricultural produce as defined under explanation 4 (vii) of the Notification No. 11/2017-Central tax (Rate) dated 28/06/2017 as 'agricultural produce" means any produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw materi....
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..... The clarification clearly deals with certain issues such as 1. Primary Market :- Green tea leaves which attain primary marketability soon after being plucked from tea plant is 'Agricultural Produce' and not the dried tea leaves. 2. Essential characteristic :- Sugarcane looses its essential characteristic when processed as jaggery. Hence jaggery is not a 'Agricultural Produce'. 3. Process :- Dehusking and splitting or both of pulses is not carried out by farmer or at farm level therefore pulses are not 'Agricultural Produce'. While pulse grain such as whole grain, Rajama etc which are directly sold in primary market with little or no processing at farm level are regarded as 'Agricultural Produce'. 20. Based on above notifications and circular, goods as per Group A to G are discussed as Follows: Group A Fennel (Saunf), Coriander(Dhaniya), Cumin Seeds (Jeera), Carom Seeds(Ajwain), Fenugreek Seeds(Kasoori Methi), Mustard Seeds (Sarson), Brown Mustard Seeds (Rai),Nigella Seeds(Kalonji), Poppy Seeds(Posara Dana) : The Appellant has mentioned that the above products are subjected to cleaning of dust, mud and impurities at the end of the trader. They have added that ....
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....nd) for sale. We find that in case of tamarind, the tamarind pod is cracked open, string (fibre) are removed and kernel is taken out. Thus, the resultant tamarind (ambali foal) also do not fall under the definition of agriculture produce as the shelling and removal of seeds to obtain the pulp is usually done by specially designed machines. Hence inner pulp without shell and/or seeds do not fall under the definition of 'Agricultural Produce' as it loses its essential characteristics. Therefore Services of storage or warehousing of such produce would not remain exempt under the above said notifications No. 11/2017-Central Tax (Rate) and 12/2017-Central Tax (Rate) both dated 28.06.2017. (Group D) Dry mango (Sukha Amchur) (Kacchi Karrie) Kathodi (Sukhi Kathodi), Dry Gooseberry (Sukha Amla) (Kacha Amla), Dry Water Caltrop/Water Cashewnut (dry Singadha), Dry Peas (Sukha Matar) The appellant has submitted that the cultivators bring these goods in a dry/ cut form to the Mandis and thereafter goods are bought by the traders in the same form and shape as it is bought by the farmers to the Mandi. The traders who bought the goods don't process it any further before bringing the goo....
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....ated 28.06.2017. (Group F) Groundnuts (Mungfalli), Coconut (Copra Gola) The Appellant has submitted that the farmers bring the entire product which includes nut, and its outer shell to the market. The trader only gets the outer shell removed for the convenience of storage of the goods but it can be easily appreciated that the Groundnut and Coconut are always known, purchase, grown for the nut and its outer shell has no use whatsoever. So, removal of outer shell either at the hands of cultivator or at the hands of the trader will never bring any change in its essential character or marketability of the Groundnut and coconut. We can't appreciate the stand taken by the Appellant. There is no need of removing outer shell for selling the groundnut or coconut in the primary market. Removal of outer shell makes these capable for sell in the secondary market also. Further this process is not undertaken at the farm. Only by help of machines or specialized plants, outer shell is removed. Thus the above produce without shell do not fall into the category of Agricultural Produce and Services of storage or warehousing of such produce would not remain exempt under the above said n....