TMI Blog2019 (3) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and 54(c) ibid under the above notifications Nos. 11/2017-Central Tax (Rate) and 12/2017-Central Tax (Rate). Coming to the first condition, we find that the impugned process is not being carried out at an Agricultural Farm. It is being carried out mechanically in the Factory away from the Agricultural Farm - Coming to the second condition, we find that the process of cleaning does not alter the essential characteristics of the agricultural produce - Coming to the third condition, we find that the process of cleaning undertaken at the end of the appellant make the produces like Saunf (Fennel),Dhaniya (Coriander), Jeera (Cumin seeds) marketable for the secondary market. After this cleaning these produces comes to the stage where these can be directly consumed by the general public. While Saunf (Fennel), Dhaniya (Coriander), Jeera (Cumin seeds) which farmer brings into the primary market is not suitable for direct consumption by the general public - the impugned process succeeds only on one count while it failed miserably on other two counts. By no stretch of imagination activity of mechanized cleaning falls under intermediate production process as job work in relation to cult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Finance Act, 1994 and Point No. 4.4.6 of the Educational guide of Service Tax in their favour. 7. Authority for Advance Ruling (AAR), after perusing the records submitted by the department and Applicant (now Appellant before this forum) and after hearing the Applicant ruled as under :- The activity of the Appellant i.e. M/s. Rara Udhyog, Jaipur is not covered by Entry S. No. 24 (i)(i)(c) or S. No. 24(i)(iii) of Notification No. 11/2017 Central tax (Rate) dated 28/06/2017 AND Entry S. No. 54(c) or Entry No. 55 of Notification No 12/2017-Central Tax (Rate) dated 28/6/17 will not attract NIL rate of tax. 8. Being aggrieved with the Ruling of the AAR, the Appellant has filed appeal before this forum. CASE FOR THE PARTY 9. That the order had not taken into account the provision of Finance Act 1994 which were exempting the services discussed in the application for Advance Ruling during the regime of Service Tax. 10. The activities in question were duly exempted during the regime of Service Tax and similar entries are introduced in GST provision. The detailed discussions were made in the application as to how the activities covered in the GST Act was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral tax (Rate) dated 28/06/2017 and Entry No. 54(c) of Notification No 12/2017-Central Tax (Rate) dated 28/6/17 attracting NIL rate of duty. 15. Further the point 4.4.6 alternatively also clarifies Shelling of paddy would not be covered in the negative list entry relating to agriculture as this process is never done on a farm but in a rice sheller normally located away from the farm. However, if shelling is done by way of a service i.e. on job work then the same would be covered under the exemption relating to carrying out of intermediate production process as job work in relation to agriculture . Applying the ratio cleaning activity done by the applicant firm may be treated as intermediate production process as job work in relation to agriculture produce. Therefore, alternatively activity of cleaning may also be covered by Entry No. S. No.24(i)(iii) of Notification No. 11/2017 Central tax (Rate) dated 28/06/2017 and Entry No. 55 of Notification No 12/2017-Central Tax (Rate) dated 28/6/17 attracting NIL rate of duty. Personal Hearing (PH) 16. In the matter personal hearing was given to the Appellant and accordingly Shri Alok Kumar Kothari, Advocate, appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) 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 by way of- (a) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; (b) supply of farm labour; (c) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, - sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market; (d) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use; (e) loading, unloading, packing, storage or warehousing of agricultural produce; (f) agricultural extension services; (g) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (4) (5) 54 Heading 9986 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 by way of- (a) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; (b) supply of farm labour; (c) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market; (d) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use; (e) loading, unloading, packing, storage or warehousing of agricultural produce; (f) agricultural extension services; Nil Nil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , ruled AAR. 21. We find that there are three ingredients of the Entry No. 24(i)(i)(c)and 54( c) ibid. (i) Stated processes should be carried out an agricultural farm ; (ii) Stated processes should be of such nature which does not alter the essential characteristics of the agricultural produce ; (iii) Stated processes should be of such nature which make the produce marketable for the primary market. 22. A process must satisfy all the three conditions before being declared as the process exempted from GST vide the above said entries Nos. 24(i)(i)(c) and 54(c) ibid under the above notifications Nos. 11/2017-Central Tax (Rate) and 12/2017-Central Tax (Rate). 23. Coming to the first condition, we find that the impugned process is not being carried out at an Agricultural Farm. It is being carried out mechanically in the Factory away from the Agricultural Farm. Coming to the second condition, we find that the process of cleaning does not alter the essential characteristics of the agricultural produce. Coming to the third condition, we find that the process of cleaning undertaken at the end of the appellant make the produces like Saunf (Fennel),Dhaniya (Coriander), ..... X X X X Extracts X X X X X X X X Extracts X X X X
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