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2017 (5) TMI 518 - AT - Service TaxBusiness Auxiliary Service (BAS) - Goods Transport Service (GTA service) - Renting of Immovable Property Service - demand - manufacture of cigarettes and undertaking of other processes to make tobacco suitable for manufacture of cigarettes - Held that: - 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 01/07/2012 - there is no merit in the impugned orders where the said activity of threshing and redrying was brought under BAS - demand set aside. 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 - the main plea of assessees on this issue is that no consignment notes have been raised - Held that: - 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 upheld. Renting of immovable property for commercial purpose - Department has demanded the service tax under sub-section (105) (zzzz) of Section 65 Finance Act, 1994 w.e.f. 01/06/2007 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 - demand upheld. Commission paid foreign agents - demand - foreign agent acted as an agent outside India in relation to sale of the processed tobacco - Held that: - the services rendered by the foreign agent shall be classifiable as a taxable service under clause 19(1) of Section 65 of the Finance Act, 1994 and the commission paid shall be liable to service tax - 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. Issue of penalties is remanded for de novo consideration. However, it is clarified that such reconsideration will only be concerning penalties with regards to demands of GTA, Renting of Immovable Property and commission paid to foreign agent. Appeal disposed off - appeal allowed in part and part matter on remand.
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