TMI Blog2017 (2) TMI 1355X X X X Extracts X X X X X X X X Extracts X X X X ..... de. 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 con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lved in BAS (Rs.) Amount involved in GTA (Rs.) Amount involved in Renting of immovable property (Rs.) 1. ST/341/ 2011 M.L. Agro Products Ltd. 8,66,65,781/- 5,23,412/- N/A 2. ST/2026/ 2012 Alliance one Industries India (P) Ltd. 3,57,50,467/- 6,25,190/- N/A 3. ST/20446/ 2014 Premier Tobacco Packers (P) Ltd. N/A 76,301/- ₹ 51,152/- 4. ST/20578/ 2014 Premier Tobacco Packers (P) Ltd. 6,67,16,981/- N/A N/A 5. ST/28327/ 2013 C.C., C.E. S.T. -GUNTUR 19,14,667/- Set aside by OIA ₹ 55,211/- upheld ₹ 6,180/- upheld 6. ST/26101/ 2013 Premier Tobacco Packers (P) Ltd. 1,65,09,143/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19. ST/23610/ 2014 DTE Exports (P) Ltd. 1,23,54,437/- 73,536/- 7,416/- 20. ST/449/ 2012 Mahi Agro Products (P) Ltd. 2,78,56,661/- N/A N/A 21. ST/30365/ 2016 Mahi Agro Products (P) Ltd. 51,05,071/- N/A N/A 22. ST/25324/ 2013 Mahi Agro Products (P) Ltd. 1,08,06,070/- N/A N/A 23. ST/23403/ 2014 Mahi Agro Products (P) Ltd. 68,08,493/- N/A N/A 24. ST/26434/ 2013 Maddi Lakshmaiah Co. Ltd. 1,38,88,315/- 1,05,664/- N/A 25. ST/2365/ 2012 India Tobacco Traders N/A 4,77,856/- N/A 26. ST/27967 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40. ST/30368/ 2016 Alliance One Industries (P) Ltd. 2,05,50,911/- 9,48,151/- N/A 41. ST/27968/ 2013 Indian Tobacco Traders N/A 49,145/- N/A 42. ST/2798/ 2012 C.C., C.E. S.T. GUNTUR 4,70,604/- Set aside by OIA N/A N/A 43. ST/26433/ 2013 M.L. Agro Products (P) Ltd. 1,92,57,626/- 52,030/- N/A 44. ST/2164/ 2012 Premier Tobacco Packers (P) Ltd. 91,24,002/- 1,23,398/- 10,506/- 45. ST/2163/ 2012 Premier Tobacco (P) Ltd. 1,17,84,314/- N/A N/A 46. ST/28427/ 2013 C.C., C.E. S.T. GUNTUR 3,62,234/- Set aside by OIA N/A N/A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed appeals against order of lower authority setting aside the demands of service tax on BAS. In one case (Sl. No. 16 of table), department is in appeal only on non-imposition of penalties by the adjudicating authority. 3.4 With this background, we heard Shri Y. Sreenivasa Reddy, Shri Ch. Venkateshwara Rao, Shri S. Sankaravadivelu and Shri G. Prahlad, learned advocates for the assessees. The submissions of these counsels can be summarised as under : (i) Department has wrongly demanded service tax liability under BAS, which was introduced w.e.f. 1-7-2006 under S. 65(19) of the Finance Act, 1994. They submit that as per Notification No. 14/2004, dated 10-9-2004, they are exempted from tax liability on BAS for the reason that their services are in relation to agriculture . Further they submit that as per the Notification No. 19/2005-S.T., dated 7-6-2005, the words in clause (b) of Notification No. 14/2004-S.T., namely, production of goods on behalf of the client were substituted by the words production or processing of goods for, or on behalf of the client w.e.f. 7-6-2005. Another argument advanced by the counsels is that Government of India vide Circular No. 143/12/2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting or textile processing . Learned counsels submit that as the activity in question has been confirmed as one relating to agriculture, the same would perforce fall in the negative list of services fully exempted from service tax. They also highlight the clarification 4.4.6 in Education Guide issued by C.B.E. C. after introduction of Negative List, which read as under :- 4.4.6. Would operations like shelling of paddy or cleaning of wheat carried out outside the farm be covered in the negative list entry relating to agriculture as sub-clause (iii) of clause (d) of Section 66D relating to services by way of processes carried out at an agricultural farm? The said sub-clause (iii) also includes such like operations which do not alter the essential characteristic of agricultural produce . Therefore, activities like the processes carried out in agricultural farm would also be covered if the same are performed outside the agricultural farm provided such processes do not alter the essential characteristics of agricultural produce but only make it marketable in the primary market. Therefore, cleaning of wheat would be covered in the negative list entry even if the same is done out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... co buyers requirements, in addition to above, chemical analysis of tobacco is performed on Auto analyzer backed by manual filtrations using various chemicals. Tobacco will be packed with a fully computerised packing system. The final product is packed by a fully computerised automatic press into cartons for sale. Lastly, he also justified the demands confirmed in respect of GTA Renting of Immovable Property services. 5.1 We heard both parties at length and perused the records. 5.2 It is seen that as per Notification No. 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 Notification No. 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. Board s Circular No. 143/12/2011 had, in the wake of representations, clarified that the process of threshing and drying of tobacco undertaken for, or on behalf of the clients by the processing units are covered by the expression processing of goods for, or on behalf of, the client.... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tobacco is still called as unmanufactured tobacco only. Therefore the entire threshing operation can be technically called Post Harvest operations of Virginia Tobacco cultivation for quality control and pre-shipment inspection. 5.4 In view of the above, we are of the view 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 1-7-2012. Hence, we find no merits in the impugned orders where the said activity of threshing and redrying was brought under BAS. On this issue, the concerned assessee-appellants will get the relief. By implication, Department s appeals against the relevant impugned orders which have set aside demands made by original authorities on BAS will require to be dismissed. 6.1 The next issue is regarding the 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. Learned counsels submit that the assessees are Goods Transport Operators (GTO) and not GTA. They have rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) S.T.R. 423 (Tri.-Del.), it would be worthy of reproducing relevant portion of the Tribunal s finding herein below : 4. Ld. DR; on the other hand, supports the order of the authorities below. When we find that the first Appellate Authority appears to have rightly understood the matter in controversy, there is no quarrel on the consignment note to give any interim relief to the appellant. Consignment note may not necessarily be in any format since no such format is prescribed under law but the documents accompanying the goods identifying the consignor and consignee, route of consignment enable to construe what a consignment note is and the appellant s grievance that the consignment note was mandatory does not find support of law when fact and circumstances demonstrate route of goods moved disclosing identity of consignor and consignee and goods consigned. Hence, we find no reason to interfere with the orders where service tax has been demanded under GTA. The same is sustained. On this point, the concerned appeals are dismissed. 7.1 The next issue is regarding the renting of immovable property for commercial purpose. Department has demanded the service tax under sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hmedabad Tribunal has observed 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. In this background, we remand all these cases for de novo consideration only on the issue of penalties on tax demands in respect of GTA and Renting of Immovable Property and commission paid to foreign agents, whether at all leviable in the facts and circumstances of each of these cases, and if imposable, the quantum thereof in accordance with law. Needless to say, the respective authorities in de novo will afford reasonable opportunity to the appellants to put forth their case. Additional evidences may also be admitted under law. 10. In the result, all the appeals are partly allowed and partly remanded as stated below :- (i) Demands of service tax on Business Auxiliary Service are set aside (in Appeal Nos. ST/341/2011, ST/2026/2012, ST/20578/2014, ST/26101/2013, ST/20789/2014, ST/28252/2013, ST/30498/2016, ST/2075/2012, ST/663/2011, ST/30682/2016, ST/450/2012, ST/3337/2012, ST/20734/2015, ST/23610/2014, ST/449/2012, ST/30365/2016, ST/25324/2013, ST/23403/2014, ST/26 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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