2019 (3) TMI 614 - AT - Service Tax

Liability of service tax - storage and warehousing charges or not - lease rentals charged and collected by appellants on monthly basis for supply and installation of storage tanks called as bullets in the premises of the buyer to store LPGs supplied - Held that - The issue has been decided in appellant own case M/S. TOTAL OIL INDIA LTD. VERSUS CCE, SALEM 2018 (6) TMI 198 - CESTAT CHENNAI where it was held that as the appellant is not having any control over the goods and they are not responsible for the security of the goods, the appellant is not covered under the category of Storage and Warehousing Services - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Service tax liability in respect of lease rentals for storage tanks called "bullets."

Analysis:
The Appellate Tribunal CESTAT CHENNAI addressed the issue of service tax liability concerning lease rentals charged for storage tanks called "bullets." The Tribunal referred to a previous decision in Appeal ST/199/2012 where it was held in favor of the appellant. The Tribunal highlighted that the lease of storage tanks was a right to use the tanks for storage, and the customers were responsible for connecting the tanks to various equipment for using LPG. The Tribunal cited a similar case, Inox Air Products vs. Commissioner of Central Excise, to emphasize that once the goods were passed on to the customer and stored in the tank, the responsibility shifted entirely to the buyer. Based on these findings, the Tribunal concluded that the appellant did not fall under the category of Storage and Warehousing Services as defined under the Finance Act, 1994. Consequently, the demand for service tax was deemed unsustainable, and the impugned order was set aside, allowing the appeal with any consequential relief as per law.

The Tribunal reiterated that there were no new grounds or reasons to deviate from the earlier decision. Therefore, the impugned order was set aside, and the appeal was allowed with any consequential benefits as per the law. The judgment emphasized the nature of the lease agreement for storage tanks, the lack of control by the appellant over the stored goods, and the responsibility of the customers once the goods were transferred and stored in the tanks. The decision was based on the principle that the appellant did not fall under the category of Storage and Warehousing Services, leading to the allowance of the appeal and setting aside of the demand for service tax. The Tribunal's analysis focused on the contractual terms, the transfer of responsibility to customers, and the lack of control by the appellant over the stored goods as key factors in determining the service tax liability in this case.