TaxTMI 
TaxTMI 
2026 (6) TMI 1423
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....-SVTAX-000-COM 135-16-17 dated 28.11.2016, whereby, Service Tax amounting to Rs. 85,38,967/- along with applicable interest and penalties, has been confirmed against the appellant. 2. The fact, in brief, is that the appellant are engaged in cultivation, processing and sale of hybrid seeds. During audit conducted by the Department, differences were noticed between freight expenses reflected in the profit and loss account and figures declared in ST-3 returns. Based on such differences, the Department entertained a view that the appellant had failed to discharge Service Tax liability, particularly under Reverse Charge Mechanism in respect of freight and related charges. 3. Accordingly, Show Cause Notice dated 19.10.2015 was issued invoki....
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....uct, whereas hybrid seeds are not meant for consumption but only for sowing and cultivation. 9. It is further submits that even assuming tax were payable, the issue is interpretational and therefore extended period of limitation and penalties cannot survive. Learned Counsel for the appellant has relied on the following judgments: i) Stemcyte India - SC - 2025 (7) TMI 1007. ii) Padmini Products - SC- (1989) 4 SCC 275. iii) Chemphar Drugs - SC - (1989) 2 SCC 127. iv) Pushpam Pharmaceuticals - SC - 1995 Supp (3) SCC 462. v) Ramakrishna Electricals - CESTAT Hyderabad - 2026 (1) TMI 713. vi) Srinivasa Outsourcing - CESTAT Hyderabad - 2026 (1) TMI 1398. 10. Learned Authorized Representat....
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....) Classification of service, and iv) Basis of its computation. 15. A demand cannot be sustained merely on accounting mis-match without establishing taxable event. The burden to establish taxability squarely lies upon revenue. 16. Further, the core issue is whether hybrid seeds continue to remain agricultural product after processing. Revenue has strongly relied on Apeejay Tea Ltd., and others, supra, we have carefully gone through the said judgment. In Appejay Tea, the Hon'ble Gauhati High Court was concerned with Tea, which after processing becomes a commercially marketable finished product meant for consumer consumption. In our view, the factual matrix of the present case is materially different. Hybrid seeds are not sold f....
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.... cannot arise merely because an expense is recorded under freight head. Taxability depends on the nature of service provider and statutory liability. The Adjudicating Authority failed to undertake this exercise. 20. The demand has been raised by invoking extended period. Extended period of limitation requires proof of fraud, suppression, wilful misstatement, or deliberate intend to evade tax. No such ingredient is established. The dispute essentially concerns interpretation of exemption notification, scope of agricultural produce, and freight-related service classification. It is settled law that where issue involves interpretation, extended period cannot ordinarily be invoked. Mere accounting difference is insufficient to establish supp....