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TMI Blog2023 (4) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... like cotton, groundnuts, banana and turmeric. Besides, the society is providing marketing facilities such as auction yards, Drying place and short term storage facilities in the open yard and also rendering jewel loans to its members. 1.2 The contention of the Department is that the society is engaged in conducting auction of goods for monetary consideration, collecting appraising charges for sanction of jewel loans to its members and also making payment of freight for transport of goods. As the society is involved in rendering taxable services for consideration falling under (i) Auctioneer's service, ii) GTA service and iii) Business Support Service of the Finance Act, 1994, without obtaining registration, without payment of appropriate service tax and without filing ST-3 returns as mandated, a Show Cause Notice dated 21.10.2011 for the period from 2006-2007 to 2010-2011 for demanding service tax of an amount of Rs. 17,12,985/- under Auctioneer's Service, an amount of Rs. 40,530/- under BSS and an amount of Rs. 7,26,770/- under GTA service invoking extended period, apart from demanding interest under Section 75 of the Finance Act, 1994 and proposing levy of penalties under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the said produce, a base price for the same is quoted by the society. A person who is well versed in the auction proceedings engaged by the society, announces the base price fixed for those lots. On examining the goods, the buyers/traders quote their prices for the said lots. On getting concurrence from the farmers concerned for the prices offered by the traders, the goods are sold to the highest bidder for the said produce and on completion of sale, the sale proceeds are disbursed to the farmers immediately after deducting a service charge of 2% on cotton and groundnut and 2.5% on turmeric on the value of the produce sold in auction which is accounted as "Marketing of service charges from farmers". Further, they are also collecting 1% from the traders/merchants as "Handling charges" on the sale prices of these lots. 2.2 For conducting the auction, the traders are informed in advance through various media. Auction register is maintained by the society, wherein lot numbers, name of the farmer, quantity, auctioned price, bidder's name are clearly mentioned. On completion of auction, a weighment slip is given to the farmer wherein the name and address of the farmer, lot number, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Producers Co-operative Marketing Society Ltd. Vs. CCE 2021 (3) TMI 218 - CESTAT, Chennai. 4. M/s. Attur Agricultural Producers Vs. CCE 2019 (8) TMI 262 - CESTAT, Chennai. Further, the learned Advocate has also raised a plea that the services rendered by the society are more appropriately classifiable under "Business Auxiliary Service" (BAS in short), as the BAS refers to promotion, marketing or sale of goods provided or produced/ belonging to the clients and included a commission agent. The definition of Commission Agent is a person who acts on behalf of another and causes sale or purchase of goods for consideration. As the appellant caused the sale or purchase of agricultural produce, the services rendered by the society are more in the nature of a commission agent under BAS. It is pointed out that the above service is exempted under Notification No. 13/2003-ST dated 20th June, 2003, as the commission agent rendering service relating to sale or purchase of agricultural goods are exempted under this notification. Thus, it is the assertion of the appellant that their services are not classifiable under "Auctioneer Service" because the agricultural produce is sold through a tend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their ST-3 returns. There is no finding also that they have intentionally suppressed facts relating to their activities. So in terms of the principles laid down by the Hon'ble Supreme Court in its judgment in the case of Tamil Nadu Housing Board Vs. Collector of Central Excise (Mad.)-74 ELT 9 (SC), invoking the extended period of limitation was clearly illegal and without jurisdiction. 3. Learned DR Shri M. Ambe has reiterated the findings of the Lower Adjudicating authorities. He has argued that the appellant is engaged in providing space, infrastructure and receipt of goods from the members, facility of short term storage of goods, grading of the goods, advertisement about the auction dates in various media, fixing pre-market prices for the commodity in auction, conducting the auction by its own employees, confirming the sale amount and delivery of the auctioned goods to the bidders and as such all the ingredients of the auction services are fulfilled in respect of the services rendered by the appellant and so the demands are liable to be confirmed. In case of tender, all the above services are not provided and so the correct classification of services will be under "Auctioneer' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e auction sale from other sales which is pointed out therein is that the auction sale is on the spot and is by public competition. Everybody present at the time of the said sale is entitled to raise his own bid on the spot and that is how the highest bidder is determined. It is pointed out that in a case of sale by tenders or by calling for offers, there is no opportunity to the intending buyer to raise his own bid. It is, therefore, urged that sale by inviting offers cannot be a sale by public auction. It is also pointed out relying upon the provisions of section 6 of the partition Act that in an open spot sale everybody would know the reserved bid or the upset price fixed therein and the bid would be above that. 18. I may usefully refer in this regard to the Halsbury's Laws of England Volume 2 Fourth Edition for what an 'auction' means. Para 701 on page 360 is relevant. According to Halsbury's Laws of England, "the auction is a manner of selling or letting property by bids, usually to the highest bidder by public competition. The prices which the public are asked to pay are the highest which those who bid can be tempted to offer by the skill and tact of the auctioneer under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tender and NOT through auctions. The Auctioneer's service does not cover the service of tender. As far as the demand under BSS is concerned, evidently, the cooperative society is engaged in the business of lending money to their members and have been collecting some charge towards appraising the value of the pledged jewels in the process. This is not service rendered to anybody at all. It is true that, in turn, the appellant has been borrowing money from their bank but it does not mean that the appellant is supporting service of the bank. They are borrowing money from the bank on their account and in turn lending it to their members. In view of the above, we find that demands on both these counts are not sustainable and need to be set aside and we do so. Consequently, the demand of interest and penalties also deserve to be set aside. The impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law." We find that the facts for our consideration in these two appeals are identical. The marketing and other services rendered by the appellant to their farmer members in selling their agricultural produce through tender process would not be coming u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We find that learned advocate has relied upon the decision rendered in the case of M/s. Mutual Industries Ltd. Vs. Commissioner of CST, Vapi (supra), wherein it was held that denial of benefit of 75% exemption under GTA services for want of endorsement on the consignment note to the effect of non-availment of Cenvat credit is not maintainable. Considering this decision, we have to hold that the appellant is eligible for the benefit of Notification No. 32/2004-ST dated 03.12.2004 in computation of the demand of service tax payable for GTA service rendered. 5.5 On the issue of invoking the extended period, we find that the appellant is a Co-operative Society and the issue is interpretational in nature. There were various notifications giving exemption and abatement in respect of GTA service during the relevant time. The appellants have put forth that no malafide can be attributed to evade payment of service tax and non-payment of service tax was due to the bonafide belief and there was no deliberate intention for not paying tax and it is the responsibility of the Revenue to discharge the burden that the appellants have deliberately omitted to pay tax. GTA service was introduced w.e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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