2015 (1) TMI 460 - AT - Service Tax

Storage and Warehousing Services - appellant is providing storage tank to their customers for storage of gas - Held that - In this case to decide the taxability of service the real test is that when the goods have been passed on to the customer. From the facts of the case it is emerging that the gas in the storage tank installed at the place of buyer and the goods transferred to the buyer. Therefore there is no control of the appellant on the goods in storage tank after gas is stored in the tank the whole responsibility of the goods is with the buyer only. In these circumstances 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 as defined under Section 65(102) of the Finance Act 1994. - Decided in favour of assesse.

Summary

Issues:
Service tax demand confirmed for Storage and Warehousing Services.

Analysis:
The appellants appealed against the order confirming service tax demand for Storage and Warehousing Services from August 16, 2002, to March 2012. The case involved the appellant providing storage tanks to customers for storing gases like oxygen, nitrogen, and argon at -269^0C. The appellant charged rent for the storage tanks and maintained them, paying Central Excise duty and VAT on the rent. The Revenue argued that the rent charged fell under 'Storage and Warehousing Services' as per Section 65(102) of the Finance Act, 1994, initiating proceedings against the appellant. The appellant contended they were merely renting out storage tanks and not providing storage and warehousing services, as they did not control the goods stored in the tanks. The appellant also argued against double levy of duty, citing a Tribunal decision in a similar case.

The Chartered Accountant representing the appellant argued that they did not provide storage and warehousing services as they did not control the goods stored in the tanks, which were under the buyer's control. The appellant did not maintain an inventory of the goods and therefore should not be liable to pay service tax under the said category. The appellant had already included the rent charge in the assessable value of excisable goods, so double levy of duty was unwarranted. The appellant also referenced a previous Tribunal decision to support their case. On the other hand, the Additional Commissioner opposed the appellant's argument, stating that the storage tanks were under the appellant's control as they were responsible for maintenance and insurance, making them liable for service tax under Storage and Warehousing Services as per Section 65(102) of the Finance Act, 1994.

After hearing both parties, the Tribunal analyzed the case to determine the taxability of the service provided. It was observed that once the goods were transferred to the buyer and stored in the tanks, the appellant had no control over the goods, and the buyer held full responsibility. As the appellant did not control the goods or ensure their security, they did not fall under the category of Storage and Warehousing Services as defined in Section 65(102) of the Finance Act, 1994. Consequently, the Tribunal set aside the impugned orders and allowed the appeals, providing for consequential relief if necessary.