2015 (10) TMI 2216 - AT - Service Tax

Storage and warehousing services - nature of amount collected from auction of goods where importer failed to take the delivery - The balance amount is kept back with the appellant and is returned to the importer if he approaches the appellant. Till the importer claims the balance amount the amount is shown as income in the balance sheet. It is a case of the revenue that service tax liability arises on this amount. - Held that - Tribunal in the case of Mysore Sales International Ltd. 2010 (12) TMI 453 - CESTAT, BANGALORE , India Gateway Terminal Pvt. Ltd. - 2010 (6) TMI 464 - CESTAT, BANGALORE had held that Boards Circular No. 11/1/2002 TRU dated 1/8/2002 will be applicable and no service tax liability arises on such amount which remains balance with the assessee. This ratio is followed by this Bench in the case of Maersk India Pvt. Ltd.,- 2012 (11) TMI 612 - Cestat, Mumbai . We find that the facts of the case in hand are similar to the facts in the cases where this Tribunal has taken a view in favour of the appellant. - Decision of High Court of Delhi in the case of Associated Container Terminals Ltd - 2007 (11) TMI 247 - HIGH COURT OF DELHI distinguished - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues: Service tax liability on amount shown as income in balance sheet.

Analysis:
1. The issue revolves around the service tax liability on an amount shown as income in the balance sheet of the appellant, who is registered under various service categories including cargo handling, storage, warehousing, business support, and goods transport agency services. The appellant stores imported goods in a bonded warehouse and disposes of goods through auction if importers fail to take delivery after a certain period. The revenue argues that service tax liability arises on the balance amount kept by the appellant until the importer claims it.

2. The Tribunal refers to previous cases like Mysore Sales International Ltd. and India Gateway Terminal Pvt. Ltd., where it was held that no service tax liability arises on such amounts retained by the assessee. The Tribunal also cites the case of Maersk India Pvt. Ltd. to support this view. The Tribunal finds the facts of the current case align with those where the Tribunal ruled in favor of the appellant, indicating a consistent stance on such matters.

3. The Departmental Representative relies on the judgment of the Delhi High Court in the case of Associated Container Terminals Ltd., arguing that the balance amount retained by the appellant should be considered as warehousing charges. However, the Tribunal disagrees with this argument, stating that the dispute in the current case does not concern whether the retained amount is for warehousing charges. The Tribunal highlights the distinction in facts between the cases cited by the Departmental Representative and the present case.

4. The Tribunal concludes by allowing the appeals of the assessee and rejecting the revenue's appeal. It sets aside the demand against the appellant, as the issue is now settled by the Tribunal's consistent judgments. The Tribunal emphasizes that the impugned order, in this case, needs to be overturned based on the established legal position, leading to the rejection of the revenue's appeal.

In summary, the Tribunal rules in favor of the appellant, holding that no service tax liability arises on the amount shown as income in the balance sheet, aligning with its previous judgments and rejecting the arguments put forth by the revenue.