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2022 (2) TMI 778 - AAR - GSTExemption from GST - seeds produced/ procured and processed, packed and sold by the Applicant as seeds for sowing are agricultural produce - Applicability of N/N. 12/2017- Central Tax (Rate) dated 28-06-2017 and 11/2017- Central Tax (Rate) dated 28-06-2017 - storage of the seeds in the leased storage facility/godowns, loading, unloading and packing of the seeds (heading No.9986) by the job worker on job work basis - Applicability of Sl.No.54(e) of the Notification No. 12/2017- Central Tax (Rate)dated 28-06 2017 and Sl.No.24(1)(e) of the Notification No. 11/2017- Central Tax (Ret)dated 28-06-2017 - processes, namely, cleaning, drying, grading and treatment with chemicals (heading No.9986) carried out by the job worker on job work basis - Sl.No.54(c), (h) of the Notification No. 12/2017- Central Tax (Rate)dated 28-06-2017 read with the definition of "agricultural produce" there under and Sl.No.24(1)(c), (h) and (ill) of the Notification No. 11/2017- Central Tax (Rate)dated 28-06-2017 read with the definition of "agricultural produce" thereunder or any other entry/entries - transport of seeds from the farm lands to storage facility/godown of the applicant, transport of seeds from one storage facility/godown of the applicant to the other storage facility/godown of the applicant, transport of packed seeds from storage facility/godown of the applicant to the distributor and transport of sales-returns, if any, (heading No.9965 or 9967) - Sl.No. 21(a) of the Notification No. 12/2017- Central Tax (Rate)dated 20-06-2017 - processes undertaken by the applicant, namely, cleaning, drying, grading, treatment with chemicals and packing (heading No.9986), for himself - supply or not - HELD THAT:- The applicant is supplying goods which are produce of cultivation of plants. However they are of seed quality and not grain, therefore further they are not meant for food, fibre, fuel or raw material for further processing. In the definition of agricultural produce, the word ‘raw material’ is used which is a general word and is in the company of specific words i.e., food, fibre and fuel. These specific words indicate direct consumption by human or in industry but not in cultivation. The Hon’ble Supreme Court of India in the case of GODFREY PHILLIPS INDIA LTD. AND ANOTHER VERSUS STATE OF UP. AND OTHERS (AND OTHER WRIT PETITIONS AND APPEALS) [2005 (1) TMI 391 - SUPREME COURT], held that when 2 or more words susceptible of analogous meaning are clubbed together, they are understood to be used in their cognate sense. They take, as it were, their colour from and are qualified by each other, the meaning of the general word being restricted to a sense analogous to that of the less general. In this case, it was held that even in case of inclusive definition, principle of noscitur a sociis can be applicable - Applying this rule to the present facts, supply of seed does not fall under the definition of agricultural produce as the seed does not fulfill the utilities prescribed therein. The facts presented by the applicant clearly indicate that the processing done by them to turn grain into seed quality goods is different from the processing done by a cultivator or producer of grain for primary market i.e., agricultural mandi or agricultural market yard. Therefore even on this count, the seed quality goods produced by them cannot be treated as agricultural produce. The seeds produced by them do not qualify as agricultural produce and hence: 1. Storage of seeds in the storage facility/godown, loading/unloading and packaging by job worker are not exempt under: a. Serial No. 54E of Notification No. 12/2017 as this entry pertains to Services relating 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. This entry relates to exemption of services engaged by a cultivator or an agriculturalist and not to services engaged by Seed Company; b. Serial No. 24(i)(e) of Notification No. 11/2017 as this entry pertains to support services to agriculture, forestry, fishing, animal husbandry engaged by a cultivator and not to services engaged by a seed company. 2. Cleaning, drying, grading and treatment with chemicals carried out by a job worker or on job work basis are not exempt under: a. Serial No. 54(c)(h) of Notification No. 12/2017 as this entry pertains to Services relating 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. This entry relates to exemption of services engaged by a cultivator or an agriculturalist and not to services engaged by Seed Company; b. Serial No. 24(i)(c) & (h) of Notification No. 11/2017 as this entry pertains to support services to agriculture, forestry, fishing, animal husbandry engaged by a cultivator and not to services engaged by a seed company. 3. Transportation of seeds from farm to storage facility and then transportation of packed seed from storage facility to distributors is not exempt under: a. Serial No. 21(a) of Notification No.12/2017, as this entry provides exemption on transportation services to agricultural produce and from the foregoing discussion it is established that seed is not agricultural produce in terms of the definition used in the notification, the transportation services engaged by a seed company are not exempt. 4. If processing is undertaken by an applicant himself for in house seed production, there is no supply and hence exempt.
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