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TMI Blog2017 (7) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued by the Central Board dated 01.08.2002. It appears that the circular was not placed before the Assessing Officer. Nevertheless, the circular throws light as to what would be includable in "storage and warehousing" and it states that service for goods including the liquids and gases would fall within the storage and warehousing. Above all, the legal principle should be taken note of by the third respondent, that is to say that except specific contracts so provided under Article 366(29A), no other contracts can be artificially severed to tax the sale element with respect to the goods as compromised in such composite contracts. The non-exclusivity of the agreement between the petitioner and the BPCL is also a relevant factor which the thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenging the assessment order passed by the third respondent dated 05.06.2017 for the assessment year 2015-2016 under the provisions of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act), insofar as it demands VAT on terminalling services provided to Bharat Petroleum Corporation Limited (BPCL). The petitioner has set up LPG storage and distribution facility at Tuticorin Port for storage of LPG imported into India by it. The petitioner provided the service of terminalling and storage of LPG to some of its customers. The facility created by the petitioner consist of fully refrigerated storage tank having capacity of 8,500 MTs at a distance of about 4 kilometers from the jetty. The petitioner has laid pipeline of about 4 kilometers to trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank and terminal operations. Further, the petitioner stated that they are not liable to pay VAT and that they have discharged service tax on such service rendered to BPCL and on the same transaction both the service tax and VAT cannot be charged. 4.The third respondent while completing the assessment by order dated 05.06.2017 has held that the petitioner are transferring the right of using their storage facility to BPCL for storing LPG at the Tuticorin Port for a monetary consideration of ₹ 719 per MT of LPG handled by them which amounts to transfer of right to use the goods and even if the storage facility is fixed on land, it is not a fixed asset like land/building/space but a gadget for intake of LPG from ship, storage, dosing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to include storage and warehousing services for goods including liquids and gases but does not include any services provided for storage of agricultural produce or any service provided by a cold storage. Taking note of this definition, the Central Board has issued a circular in Circular: B11/1/2002-TRU dated 01.08.2002 and in annexure therein, it specifically dealt with storage and warehousing. It is submitted that as per Clause (87), storage and warehousing includes storage and warehousing services for goods including liquids and gases. Therefore, it is submitted that the finding rendered by the third respondent in the impugned order is not sustainable. 6.Reliance was placed on the decision of the Hon'ble Supreme Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the Delhi High Court in the case of Commissioner, VAT, Trade and Taxes Department vs. International Travel House Ltd. reported in 2009 25 VST 653 (Del), wherein it was pointed after referring to the decision in the case of Bharat Sanchar Nigam Ltd., that except the specific contracts so provided under Article 366(29A) no other contracts can be artificially severed to tax the sale element with respect to the goods as comprised in such composite contract. Therefore, it is submitted that on thorough misconception of the legal position, the impugned assessment has been made. 8.The learned Government Advocate would vehemently contend that the Assessing Officer has made a in-depth study of the terms and conditions of the agreement an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the circular throws light as to what would be includable in storage and warehousing and it states that service for goods including the liquids and gases would fall within the storage and warehousing. Above all, the legal principle should be taken note of by the third respondent, that is to say that except specific contracts so provided under Article 366(29A), no other contracts can be artificially severed to tax the sale element with respect to the goods as compromised in such composite contracts. The non-exclusivity of the agreement between the petitioner and the BPCL is also a relevant factor which the third respondent has not considered. Furthermore, the installation which have been erected by the petitioner are fixed to the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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