Custom, Excise & Service Tax Tribunal
M/S Nandi Sahakari Sakkare Karkhane ... vs Commissioner Of Central Excise And ... on 27 November, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/1521/2012-SM [Arising out of Order-in-Appeal No. 126/2012 dated 06/03/2012 passed by Commissioner (Appeals), Mangalore] For approval and signature: HON'BLE SHRI ASHOK K ARYA, TECHNICAL MEMBER 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes M/s NANDI SAHAKARI SAKKARE KARKHANE NIYAMIT KRISHNA NAGAR, HOSUR DIST BIJAPUR - 587117 Appellant(s) Versus Commissioner of Central Excise and Service Tax, BELGAUM NO. 71, CLUB ROAD, CENTRAL EXCISE BUILDING, BELGAUM 590001. Respondent(s)
Appearance:
Mr. U.G. Ammangi, C.A. For the Appellant Mr. Pakshi Rajan, A.R. For the Respondent Date of Hearing: 27/11/2015 Date of Decision: 27/11/2015 CORAM :
HON'BLE SHRI ASHOK K ARYA, TECHNICAL MEMBER Final Order No. 22126 / 2015 PER ASHOK K ARYA Both the parties have been heard in detail.
2. The issue concerns with the chargeability of Service Tax on the Service of Goods transportation, when such service is provided by the farmers using their own tractors. Here the supply is made of the goods namely, sugar cane to the factory of the appellant.
2.1 The appellant represented by the learned Chartered Accountant , Shri U.G. Ammangi argues that when the goods are being supplied in their own vehicles (tractors) by the farmers to the appellant and when these individual farmers cannot be called commercial concern, service tax cannot be charged from the appellant under the expression of commercial concern, which has been defined under Section 65 (50b) of Finance Act, 1994. Learned C.A. cites in support the decisions of the CESTAT, Bangalore in the case of MSPL Ltd. Vs. Commissioner of Central Excise, Belgaum [2008] 20 STT (BANG CESTAT] and in the case of Bellary Iron & Ores (P) Ltd. Vs. Commissioner of Central Excise, Belgaum [2010] 24 STT 557 (BANG-CESTAT].
3. The learned A.R., Shri Pakshirajan representing the respondent i.e. Revenue argues that it is not material whether the transporter is a commercial concern or not. He argues that even the individual operator or a transporter having no commercial motive will also be covered within the wording of commercial concern defined under Section 65 (50b) of Finance Act, 1994. He cites in support of his claim the decision of the Honble High Court of Madras in the case of Commissioner of Central Excise, Salem Vs. KMB Granites Pvt. Ltd. [2014 (35) S.T.R. 63 (Mad.)]. He expresses that the Honble High Court of Madras in this case has held that an individual operator would be covered within the expression commercial concern under Section 65(50b) of Finance Act, 1994.
4. After carefully considering the facts on records and the submissions of both sides, it is clear that the individual farmers who transport their sugar cane by their own tractors are paid by the appellant for every individual transportation based on the weighment bills/slips. In the light of the judgement of the Honble High Court of Madras quoted above, the appellant cannot escape from the liability of payment service tax, even if the weighment bills/slips only were the basis of the payment for such transportation service. It is not necessary to find out if there was any profit motive attached with the transportation or not; the Honble High Court of Madras in above decision is clear that the individual operator would be covered under the expression commercial concern as appeared under Section 65(50b) of Finance Act, 1994 and the transactions made by the said operators would be liable for payment of service tax. The recipient of such transport services has to pay service tax as per the current scheme of payment of service tax.
5. Considering the above discussion and the decision of the Honble High Court of Madras quoted above, the appeal does not succeed and is hereby rejected in above terms.
(Pronounced in open court) (ASHOK K. ARYA) TECHNICAL MEMBER /vc/