2018 (3) TMI 854 - AT - Service Tax

Supply of tangible goods service - amount collected by appellant as fixed facility charges from their clients for installing gas storage facility in the premises of the client - Held that - Admittedly, the clarification dated 10.11.2014 issued by the Board on similar set of facts, as well as, the clarification dated 24.04.2014 issued in respect of appellant s unit in Orissa are applicable to the present dispute - The Circular clarified that fixed facility charges are part of transaction value for the purpose of Central Excise duty - appeal allowed - decided in favor of appellant.

Summary

Issues: Liability of appellant to pay Service Tax on fixed facility charges for installing gas storage facility.

Analysis:
The judgment pertains to two appeals challenging the liability of the appellant to pay Service Tax on fixed facility charges collected for installing gas storage facilities. The appellant, engaged in the manufacture and supply of gases, had contractual arrangements with clients to set up storage facilities for gases. The fixed facility charges collected were sought to be taxed under the category of "supply of tangible goods service" as per Section 65(105)(zzzzj) of the Finance Act, 1994. The lower authorities upheld the liability for Service Tax on the appellant.

The appellant's consultant argued that a similar manufacturer had obtained clarifications from the Board and the Commissioner of Central Excise, establishing that fixed facility charges were to be considered part of the transaction value for Central Excise duty. The facts and circumstances of these clarifications were similar to the present case, leading to the submission that the impugned orders should be set aside.

After hearing both parties and examining the appeal records, the Tribunal found that the appellant, involved in the manufacture and supply of gases liable to Central Excise duty, collected fixed facility charges for setting up storage facilities at clients' premises. The Tribunal noted that the clarifications issued by the Board and the Commissioner on similar facts were applicable to the current dispute. Consequently, the Tribunal held that the impugned orders lacked merit, setting them aside and allowing the appeals.

In conclusion, the Tribunal's judgment favored the appellant, ruling that the fixed facility charges for installing gas storage facilities were not subject to Service Tax based on the clarifications provided by the Board and the Commissioner of Central Excise.