2017 (10) TMI 1455 - AT - Service Tax

Taxability - Storage and warehousing services - Reverse charge mechanism - HELD THAT - Tribunal in the appellant s own case ABAN LOYD CHILES OFFSHORE LTD. VERSUS COMMISSIONER OF SERVICE TAX CHENNAI 2012 (7) TMI 287 - CESTAT CHENNAI has held that appellant is not liable to pay service tax as the recipient of service of the nature not falling within the purview of Section 65(105)(zza) of the Finance Act 1994 r/w Section 65(102) of the said Act. Demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Taxability of storage and warehousing services provided to a Floating Production Unit (FPU) engaged in offshore crude oil extraction.
2. Interpretation of Section 65(105)(zza) of the Finance Act, 1994 and Section 65(102) in relation to the nature of services received by the FPU.
3. Impact of a previous Tribunal decision and subsequent appeal to the Supreme Court on the tax liability of the FPU.

Analysis:

1. The case revolved around the taxability of storage and warehousing services provided to the appellant, a Floating Production Unit (FPU) involved in offshore crude oil extraction. The appellant engaged a foreign company for various services necessary for the operation of a Floating Store and Offloading Unit (FSO), through which the processed crude oil was further transported to fleets. The revenue contended that the payments made for storage and warehousing services were taxable, leading to a demand raised by the impugned order.

2. The appellant argued, through their counsel Ms. Radhika Chandrasekar, that a previous decision by the Tribunal had settled the issue in their favor. The Tribunal had previously held that the appellant was not liable to pay service tax as the recipient of services that did not fall within the purview of Section 65(105)(zza) of the Finance Act, 1994 read with Section 65(102) of the same Act. Despite an appeal by the department to the Hon'ble Supreme Court, with the appeal being admitted, no stay had been granted by the Supreme Court. Consequently, the Tribunal decided to follow its previous decision and set aside the impugned order, allowing the appeal with any consequential relief.

3. The Assistant Registrar representing the respondent informed the Tribunal that the final order of the Tribunal had been appealed before the Hon'ble Supreme Court, and the Apex Court had admitted the department's appeal. However, the absence of a stay granted by the Supreme Court allowed the Tribunal to rely on its own decision in the appellant's case, ultimately leading to the setting aside of the impugned order and granting relief to the appellant. The judgment was pronounced in open court, providing clarity on the tax liability of the FPU in question.