Sathyamangalam Agricultural Producers Coop. Marketing Society Ltd. vs CESTAT

V. Ramasubramanian, J.—These appeals are filed by three different cooperative marketing societies, challenging a common order passed by the Customs, Excise and Service Tax Appellate Tribunal refusing to condone the delay of 215 days, 215 days and 310 days in filing the statutory appeals. Heard Mr. S.V. Ramamurthy, learned counsel for the appellants and Mr. V. Sundareswaran, learned Senior Panel Counsel for the respondents.

The appellants in these appeals are agricultural producers cooperative marketing societies. They are established under the Tamil Nadu Cooperative Societies Act and they function as nodal agencies, within the control of the State Agricultural Marketing Board, in terms of the Tamil Nadu Agricultural Produce Marketing (Regulations) Act, 1987 and the Rules framed therein.

On the basis of the information gathered through Intelligence, show cause notices were issued to the appellants, claiming that the appellants were rendering services as auctioneers of the agricultural produce and that therefore, the activities carried out by the appellants attracted service tax.

Though the appellants opposed the show cause notices, Orders in Original were passed, levying service tax. The appeals filed by the appellants to the Commissioner of Central Excise (Appeals), were also rejected by separate orders dated 22-3-2013, 21-3-2013 and 23-11-2012. As against the orders passed by the Appellate Commissioner, the appellants filed further appeals before the Customs, Excise and Service Tax Appellate Tribunal. But, in doing so, a delay had occasioned in filing each of the appeals. Therefore, the appellants filed necessary applications for condonation of delay. Those applications were rejected by the Tribunal by an order dated 11-8-2014 on the ground that the delay was not properly explained. Aggrieved by the rejection of their applications for condonation of delay, the appellants are before us.

A careful perusal of the affidavits filed by the appellants in support of the applications for condonation of delay would show that the delay had in fact been properly explained with genuine reasons. It is common knowledge that elections to cooperative societies become a huge and acrimonious affair in the State of Tamil Nadu. Every time elections are held, the elections become the subject matter of challenge before Courts and eventually, special officers get appointed in many cases.

Therefore, the cause of the cooperative societies actually becomes nobody''s child. In such circumstances, the Tribunal ought to have taken a pragmatic view. The appellants also appear to have a good case on merits. The auction conducted by them of the agricultural produce, harvested by their own members, may not really be a service rendered by them. These societies are established for the purpose of enabling the farmers to market their agricultural produce in such a manner that the farmers are not exploited by middlemen. In such circumstances, the question as to whether the services rendered by these societies to their own members would attract service tax, is an important issue. Eventually, any levy made upon these societies will offset the benefit that is sought to be conferred upon the farmers by legislation. Therefore, the Tribunal ought to have taken a practical view in such matters. In view of the above, the appeals are allowed, the common order of the Tribunal is set aside and the matter remitted back to the Tribunal. The Tribunal shall take up the appeals for disposal and dispose of them within a period of three months. No costs. Consequently, the above MPs are closed.