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2017 (2) TMI 1355 - AT - Service TaxBusiness Auxiliary Services - The process of threshing involves the separation of the lamina and the midrib from the tobacco leaves as they are to be processed and, used separately in the manufacture of cigarettes and allied products - Department considered this activity as BAS and brought the assessees to the service tax net - Held that:- As per N/N. 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 N/N. 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 - 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 1-7-2012 - there are no merits in the impugned orders where the said activity of threshing and redrying was brought under BAS - demand set aside. GTA Service - assessee-appellants have brought the tobacco bundles from the auction platform to their factories - main plea of the assessees on this issue is that no consignment notes have been raised - Held that:- Consignment notes can be issued in any form, as seen from definition of GTA in Section 65(50)(b) of the Finance Act, 1994 - 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 - demand under GTA Service upheld. 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” - Held that:- It is an undisputed fact that the immovable property in question was given for the purpose of commercial activities. When it is so, then the service tax is leviable - demands on Renting of Immovable Property confirmed. Demand of service tax on commission paid to foreign agents - Held that:- It appears that foreign agent acted as an agent outside India in relation to sale of the processed tobacco - Hence, the amount of commission paid shall be liable to service tax, the liability thereof being on the appellant-assessee under reverse charge mechanism in terms of Rule 2(1)(d)(iv) of the Service Tax Rules - demand upheld. Penalty - Held that:- If the service tax is paid within the period of 6 months, then penalty was not leviable under Section 80(2) of the Finance Act, 1994 which was introduced by the Budget of 2012 - cases remanded for de novo consideration only on the issue of penalties on tax demands. Appeal allowed in part and part matter on remand.
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