Green Leaf Tobacco Threshers Ltd Vs Commissioner of Central Excise & Service Tax (CESTAT Hyderabad)
The appeal was filed against an Order-in-Original dated 11.01.2013, whereby service tax demand along with penalties was confirmed against the appellant. The dispute related to two issues: whether threshing and redrying of tobacco leaves undertaken on job work basis falls under “Business Auxiliary Service” (BAS), and whether service tax was payable under “Goods Transport Agency Service” (GTAS) for the period 01.10.2009 to 31.12.2011.
The department observed that the appellant processed tobacco both for itself and for other exporters on a job work basis, earning charges for threshing and redrying. It classified this activity as BAS and demanded service tax. Additionally, the department alleged non-payment of service tax under GTAS, relying on provisions of the Finance Act, 1994 and Service Tax Rules.
The appellant contended that the issue of taxability under BAS was already decided in its favour by the Tribunal in a previous case, which held that threshing and redrying of tobacco leaves do not attract service tax under BAS. This decision was further upheld when the Supreme Court dismissed the Revenue’s appeal, thereby settling the issue. Regarding GTAS, the appellant argued that service tax liability arises only when a consignment note is issued, as required under the statutory definition. It submitted that no such consignment note was issued in its case and relied on various judicial precedents.
