Palm Oil Fruit is also Fruit: CESTAT allows GTA Exemption [Read Order]

While granting GTA exemption to palm oil manufacturers, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad bench has held that the palm oil fruit should also be treated as fruit for the purpose of availing the exemption.

The appellants are manufacturers of crude palm oil by extracting the same from the fruits of the palm trees and which are their inputs. They are availing GTA services for getting the said inputs. The department has opined that the appellant needs to take registration for discharging the liability on GTA being received.

Before the Tribunal, the assessee submitted that the GTA services availed is with respect to the transport of palm oil fruit and notification 33/2004-ST exempts from the levy under GTA of transport of fruits; that the adjudicating authority denied the exemption on the ground that although palm oil fruit is a “fruit” the same is not edible.

The department contended that what actually has been transported is palm oil which is not covered under the said Notification. Otherwise, also, the fruit from which the oil is extracted is not edible and as per the dictionary meaning of fruit, “anything which is not edible cannot be classified to be called as fruit.” Therefore, there is no infirmity in the Order-in-challenge.

The Tribunal observed that the notification is silent about any definition or the classification of fruit and all other products mentioned therein.

Referring various definitions, the Tribunal observed that “the conjoint reading of all these definitions led us to form the opinion that any product of a tree which is the result of the ripened ovary, irrespective of nature of it is edible or not, amounts to fruit. Admittedly, the product transported in the present appeal is palm oil fruit. The photographs as produced by the appellant during the arguments also support the opinion as formed by us. We are, therefore of the opinion that the fruit in question is very much covered by the notification. The adjudicating authorities below are therefore held to have formed a very rigid and narrow description of the fruit. Resultantly, the impugned order is set aside and the appeal is hereby allowed with consequential relief.”