2013 (2) TMI 435 - AT - Service Tax

Storage and warehousing Service whether the records such as discharged cheques, vouchers, deeds, agreements, books of accounts of banks and corporate houses would come under the category of goods Assessee provided the services for storage and retrieval of records of banks and corporate houses and the records consisted of discharged cheques, vouchers, agreements, books of accounts - Department was of the view that the activities undertaken by the assessee comes under the category of taxable service of storage and warehousing Held that - very reference to the definition of goods under the Sale of Goods Act implies that Saleability is a necessary condition to consider something as goods . Even in common parlance, it has been held in a number of judgments by the Hon ble Apex Court that goods are something which can come into the market for being bought and sold. As decided in the case of in R.D. Saxena v. Balram Prasad Sharma 2000 (8) TMI 1001 - SUPREME COURT OF INDIA files maintained by a bank pertaining to their clients cannot be equated with goods as they are not saleable goods and they do not have any marketability - Therefore, in the instant case also, the various old records such as discharged cheques, vouchers, books of accounts, in respect of which the service was rendered by the assessee to his clients such as banks and corporate houses for management of the records, cannot be considered as storage and warehousing of goods - Assessee are not liable to pay any service tax In favour of assessee.

Summary

Issues:
1. Whether the activity of storage and warehousing of old records by the appellant constitutes taxable service under the Finance Act, 1994.

Analysis:
1. The appellant, registered for service tax purposes, applied for centralised registration. During this time, an investigation was initiated against them for evasion of service tax related to segregation, packing, storage, and retrieval charges on old records. The department issued show-cause notices demanding service tax, which were adjudicated by the Commissioner dropping the proceedings as the storage was of old files and records not classified as goods. The revenue appealed this decision.

2. Subsequently, another show-cause notice was issued for service tax for a later period, which was adjudicated confirming the demand, classifying the service as storage and warehousing services. The appellant challenged this order.

3. The appellant argued that old records are not goods as per the Sale of Goods Act, 1930, as they lack marketability, citing a Supreme Court judgment. They contended that since files and records cannot be sold, they do not fall under the definition of goods, hence not liable for service tax. They sought to set aside the demand for service tax.

4. The revenue contended that records are movable property and thus covered under the definition of goods. They argued that saleability is not a prerequisite for levying service tax, supporting the confirmation of the service tax demand.

5. The Tribunal analyzed the definition of goods under the Sale of Goods Act, emphasizing the necessity of saleability to constitute goods. Referring to a Supreme Court case, it concluded that old records lack marketability and do not qualify as goods. Therefore, the activity of storing and warehousing such records does not fall under taxable services.

6. Consequently, the Tribunal allowed the appeal by the appellant and dismissed the appeal by the revenue, holding that the appellants are not liable to pay service tax for storing and warehousing old records of their clients.