TaxTMI 
TaxTMI 
2025 (11) TMI 601
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....der in Appeal No. 174/2016 dated 4.8.2016 and Appeal No. 40031/2018 is against Order in Appeal No 256/2017 dated 6.10.2017. 3. Brief facts of the case are that the appellant has paid commission to their foreign agents for sale of their black tea. It appeared to the department that the commission so paid attracts service tax as per section 65(44) and 65(19) of the Finance Act, 1994 read with Notification No. 30/2012 dated 20.6.2012. Hence Show Cause Notices were issued to demand service tax of Rs. 63,115/- and Rs.83,823/- respectively along with interest and for imposing penalties. After due process of law, the lower authorities confirmed the demand along with interest and imposed equal penalties. In appeal, the Ld. Commissioner (Appeals)....
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.... stretch of imagination, can a vegetable product would cease to be an 'agricultural produce' just because there is an entry in the Central Excise Tariff for such product. The Ld. Counsel drew attention to this Tribunal Final Order No.40350/2023 dated 26/05/2023, for the earlier period viz. 2007-08 to 2009, in the appellants own case holding that the processes involved in converting "green tea" into "black tea" does not alter the basic character of the tea as such and the same could not be considered as a non-agricultural product. Further, export commission paid to foreign commission agent would not be liable for service tax in India, since no service was provided in India, as held by the Hon'ble Tribunal in the case of Genom Bio....
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.... of "black tea' is liable for service tax under Reverse Charge Mechanism, especially when no service was provided in India? c) Whether the demand of interest and imposition of penalties under Sec.76 and 77 of Finance Act, 1994, is sustainable? 6. Section 65B(5) and 66D(vii) of the Finance Act, 1994 which are relevant to the understanding of the issues are reproduced below: 65B. Interpretations : In this Chapter, unless the context otherwise requires,-- . . . . (5) "agricultural produce" means any produce of agriculture 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 marketa....
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....client should be considered as covered by the expression 'in relation to agriculture. Client processing which falls under business auxiliary service undertaken on the primary agricultural produce namely tobacco or raw cashew, does not result in any change in their essential character of tobacco or cashew. in the light of the above principle (1) process of threshing and drying of tobacco leaves and thereafter packing the same and (i) processing of raw cashew and recovering kemel, undertaken for, or on behalf of, the clients by 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 said notification. 3. Also where the commissi....
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..... Further, the said Notification does not distinguish between Tea or Green Tea or Black Tea, and it is also well understood that there is no alteration to the essential characteristic other than, perhaps, making it marketable as either Green Tea or Black Tea. 10.3 In our considered view, even the processes involved in converting Green Tea into Black Tea does not alter the basic characteristic of the Tea as such and the same could not be considered as a non-agricultural product under any stretch of imagination." (emphasis added) 9. Neither of the parties have brought to our notice that the said Order of the Tribunal has been modified or set aside. Hence the same is binding. Further, even as per Board's circular dt. 26.05....