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Issues involved: Appeal against demand for service tax on Storage and Warehousing Service and imposition of penalty under Sections 77 and 78 of the Finance Act, 1994.
Summary: The appellant, M/s. Gateway Distri Parks Ltd., appealed against an order confirming a demand for service tax on the grounds of providing Storage and Warehousing Service without payment. The adjudicating authority refrained from imposing penalties under Sections 77 and 78 of the Finance Act, 1994. The appellant and the Revenue both filed appeals against the same order, with the Revenue appealing the lack of penalty imposition. The appellant provided services under various categories specified in the Finance Act, 1994 and Service Tax Rules, 1994. The issue revolved around the disposal of imported goods through auction when importers failed to claim them, leading to surplus income for the appellant. The Revenue contended that service tax was due on such income. The Tribunal referred to a previous case involving similar issues and relied on Board Circular No. 11/1/2002-TRU, along with other decisions, to rule in favor of the appellant. The Circular clarified that service tax is not applicable when custodians auction abandoned cargo and VAT/ST is paid. Following this precedent, the Tribunal set aside the demands confirmed in the impugned order and allowed the appeal. Consequently, the appeal filed by the Revenue for penalty imposition was dismissed as the demands were set aside. The decision was based on the clarification provided in the Circular and previous tribunal decisions, leading to the allowance of the appellant's appeal and the dismissal of the Revenue's penalty imposition appeal.
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