2015 (2) TMI 94 - AT - Service Tax

Storage or warehousing service - facility of storage of liquid oxygen in the hospital premises - Held that - The undisputed facts are that the respondent are manufacturers of various gases including medical grade liquid oxygen which during the period of dispute was supplied to KHRC, Noida. There is also no dispute the respondent had also supplied storage tank to KHRC and in terms of their agreement with the hospital were responsible for its maintenance of the tank and its regular inspection as per the provisions of Explosives Act. The oxygen gas sold by the respondent to KHRC was being stored in the tank and as such the same was in the custody or control of the hospital. Therefore, the respondent cannot be treated as storage or warehouse keeper in respect of the oxygen stored in the tank installed in the premises of KHRC. In view of this, we do not find any infirmity in the impugned order. The Revenue s appeal is dismissed. - Decided against Revenue.

Summary

Issues Involved:
Taxability of storage and warehousing service provided by the respondent to their client - Kailash Hospitals and Research Centre (KHRC) under Section 65(105)(zza) read with Section 65(102) of Finance Act, 1994.

Analysis:

Issue 1: Taxability of storage and warehousing service
The case involved a dispute regarding whether the respondent, as manufacturers of various gases including liquid oxygen, provided taxable "storage and warehousing" services to KHRC, Noida, by supplying liquid oxygen and storing it in cryogenic tanks at the hospital premises for a specified amount per month. The Department contended that the service fell under Section 65(105)(zza) read with Section 65(102) of the Finance Act, 1994. The Additional Commissioner confirmed a service tax demand against the respondent, which was later set aside by the Commissioner (Appeals) who ruled that the service provided did not qualify as "storage or warehousing" service. The Commissioner (Appeals) noted that the respondent supplied cryogenic storage tanks to KHRC for installation in their premises, and the oxygen stored in these tanks was under the hospital's custody, not the respondent's.

Issue 1 Analysis:
The Tribunal considered the arguments presented by both sides. The Revenue contended that since the respondent maintained the liquid oxygen storage tank and arranged for its inspection by an approved agency under the Explosives Act, they should be treated as warehouse keepers. On the other hand, the respondent's counsel argued that as the storage tank was supplied to KHRC and the respondent was only responsible for its maintenance, the oxygen gas stored in the tanks was not in their custody, and thus, they could not be considered warehouse keepers. The Tribunal examined the facts and concluded that as the oxygen gas was in the custody and control of the hospital, the respondent could not be deemed as providing storage or warehousing services for the oxygen stored in the tank at KHRC. Therefore, the Tribunal upheld the Commissioner (Appeals) decision, dismissing the Revenue's appeal and disposing of the respondent's cross-objection.

This detailed analysis of the legal judgment highlights the core issue of taxability of storage and warehousing services provided by the respondent, the arguments presented by both parties, and the Tribunal's decision based on the facts and legal provisions involved in the case.