2012 (7) TMI 79 - AT - Service Tax

Demand for service tax - Container Freight Station - department wants to levy service tax for storage of cargo under the category of storage and warehousing service rendered by the applicant Held that - in the case of Gateway Distriparks Ltd.( 2009 (2) TMI 181 (Tri)) Tribunal granted unconditional waiver of pre-deposit to the applicant. Waiver of pre-deposit granted.

Summary

Issues:
Confirmation of demand for service tax for storage and warehousing charges, applicability of service tax on auctioned cargo storage, waiver of pre-deposit during appeal.

Confirmation of Demand for Service Tax:
The judgment confirms the demand for service tax for storage and warehousing charges against the applicants, along with interest and penalties under the Finance Act, 1994. The Container Freight Station (CFS) stores cargo entering the territory of India and clears it to importers upon payment of charges. Service tax is paid on these activities when importers clear their goods. However, when importers fail to take delivery and the cargo is auctioned by the applicants, the department seeks to levy service tax for storage of such cargo under the category of storage and warehousing service provided by the applicant.

Applicability of Service Tax on Auctioned Cargo Storage:
The issue raised pertains to the applicability of service tax on storage charges for cargo that remains uncleared by importers and is subsequently auctioned by the applicants. The Tribunal considered a similar case involving Gateway Distriparks Ltd., where unconditional waiver of pre-deposit was granted on the same issue. In light of this precedent, the Tribunal decided to grant the waiver of pre-deposit for the entire amount of service tax, interest, and penalties, and stayed the demand during the pendency of the appeal filed by the applicants.

Waiver of Pre-Deposit During Appeal:
The advocate for the applicant cited the case of Gateway Distriparks Ltd., where the Tribunal had granted unconditional waiver of pre-deposit on a similar issue. Following this precedent, the Tribunal decided to grant the applicant waiver of pre-deposit for the entire amount of service tax, interest, and penalties during the pendency of the appeal. This decision was based on the principle of consistency with past judgments and ensuring fairness in the proceedings.

In conclusion, the judgment addresses the confirmation of demand for service tax for storage and warehousing charges, the applicability of service tax on auctioned cargo storage, and the grant of waiver of pre-deposit during the appeal process. The Tribunal relied on past decisions, such as the case of Gateway Distriparks Ltd., to ensure consistency in its rulings and uphold principles of fairness and justice in tax matters.