2014 (6) TMI 348 - AT - Service Tax

Demand of service tax - service of storage and warehousing - Held that - storage and warehousing includes storage and warehousing services for goods including liquids and gases but does not include any service provided for storage of agricultural produce or any service provided by a cold storage - all the operations of the outlets are under the control of the dealers and not of the appellant. It is not as if the dealers bring their goods to the appellant for storing or warehousing and thereafter clear the goods so stored. Appellant only owns and leases facilities to the dealers for their use. Keeping in view the nature of transaction the service provided cannot be considered as storage and warehousing service provided by the appellant - Decided in favour of assessee.

Summary

Issues: Whether the appellants are liable to pay service tax under the taxable service of storage and warehousing for leasing out Petroleum Products Outlets to dealers.

Analysis:
1. The case involved the appellants leasing out Petroleum Products Outlets to dealers for selling petroleum products, charging a monthly license fee for utilizing the facilities. The Revenue issued a Show Cause Notice claiming the appellants were liable to pay service tax under storage and warehousing services.

2. The main contention was that the appellants were not providing storage and warehousing services but were leasing various equipment along with the land to dealers. The appellants argued that dealers purchased and stored the products themselves, and the appellants were merely providing services related to renting tangible goods, paying service tax under a different category since 2008.

3. The Advocate for the appellants argued that the dealers controlled the storage of petroleum products, not the appellants, and therefore, the appellants were not providing storage or warehousing services.

4. The Revenue contended that since the equipment was in the name of the appellants, and they were responsible for repairs, it indicated that the appellants were providing storage and warehousing services.

5. The Tribunal referred to Section 65(102) of the Finance Act, 1994, defining 'Storage and Warehousing,' which includes services for goods but excludes services for agricultural produce or by a cold storage.

6. Upon considering the submissions, the Tribunal found that all operations at the outlets were under the dealers' control, not the appellants'. The appellants only owned and leased facilities to dealers, and the service provided could not be classified as storage and warehousing services by the appellants, leading to the appeal being allowed.

7. The judgment concluded that since the dealers controlled the operations and the appellants merely leased out facilities, the service provided did not fall under the category of storage and warehousing services provided by the appellants, resulting in the appeal being allowed.