2008 (5) TMI 194 - AT - Service Tax

Appellant were providing oil storage tankers at various places - appellants have been called upon to discharge service tax on the rentals received under the category of Storage and Warehousing Services. in view of Tribunal s ruling in the case of Finolex Industries Ltd. which is in assessee s favour, stay application is allowed

Summary

Issues:
1. Liability to pay service tax on rentals received for providing oil storage tankers under the category of "Storage and Warehousing Services."
2. Applicability of judgments in Finolex Industries Ltd. v. CCE, Pune and UOI v. Garware Nylons Ltd. in determining service tax liability.

Analysis:
1. The appellant was required to pre-deposit a specific amount towards service tax for providing oil storage tankers. The Commissioner (Appeals) set aside the demand of service tax, stating that the service did not fall under "storage and warehousing service." The appellant cited the judgment in Finolex Industries Ltd. v. CCE, Pune, where it was held that renting storage tanks did not attract service tax under the said category. Additionally, reference was made to the Apex Court judgment in UOI v. Garware Nylons Ltd. Despite the appellant's arguments, all pleas against the service tax liability were rejected.

2. The learned SDR opposed the appellant's plea, supporting the Commissioner's findings and asserting that the judgments cited by the appellant were distinguishable. The Tribunal noted that the Order-in-Appeal and the ruling in Finolex Industries Ltd. were in favor of the appellant. Consequently, the stay application was allowed, granting a waiver of pre-deposit and staying the recovery of the service tax until the appeal's disposal. It was specified that no recovery would take place even after 180 days had passed.

This judgment highlights the crucial issue of determining the liability to pay service tax on rentals received for specific services and the significance of relevant legal precedents in such assessments. The decision emphasizes the importance of legal interpretations and precedents in resolving tax disputes and ensuring fair treatment for taxpayers.