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TMI Blog2008 (6) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... ce President and Shri Rakesh Kumar, Member (Technical) S/Shri Vikrant Kachria and Rupinder Singh, Advocates for the appellant. Shri Amit Jain, Authorized Representative (DR) for the Respondent. [Order] - The appellants in appeal No. ST/132,133,134,135 and 136/06 and No. ST/512/07 and the respondents in the Revenue's appeal No. ST/407/07 are Sugar Mills. The appeal No. ST/512/07 and the Revenue's appeal No. ST/407/07 are against the same order-in-appeal passed by CCE (Appeals), Chandigarh. 1.1 The appellants in the appeal No. 132-136/06 and 512/07 are required to maintain, as per the orders of the Ministry of Consumer Affairs, Government of India, certain stock of free sale sugar for a specified period and the Appellant cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified quantity of free sale sugar for a specified period by the appellant sugar mills, as per the orders of the Ministry of Consumer Affairs, Government of India, and for which the appellant mills are reimbursed by the Government in form of a subsidy, amounts to providing storage warehousing service as defined under Section 65 (105) (zza) read with Section 65 (102) of the Finance Act, 1994 and whether the entire subsidy amount received by the appellant sugar mills would attract service tax under Section 66 of the Act. 2. Heard both the sides. 2.1 Shri Vikrant Kachria, Adovcate, the learned counsel on behalf of the appellant sugar mills, made the following submissions :- (1) The Government of India, in order to maintain a bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, stored the same in hired storage godown and thereafter sold the liquor to various wholesalers holding licenses, the demurrage fee of Rs. 2/- per day charged by the corporation from the distilleries in the case the stock of liquor purchased by them was not lifted within 90 days, would not attract service tax under "storage and warehousing service" as the ownership of the goods during the demurrage period vested in the Karnataka State Beverages Corporation and they can not be said to have provided "storage and warehousing service". (4) These exist no ground to hold that the appellant sugar mills deliberately concealed on suppressed material facts from the Revenue with mala fide intention, thereby justifying application of extended period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed period and for which they receive compensation from the Government of India in form of subsidy, as compliance with the provision of The Sugar Development Fund Rules, 1983, framed by the Government of India under Section 9 of the Sugar Development Fund Act, 1992 ; (b) The subsidy received by the appellant sugar mills from the Government is only to cover their expenses towards interest on stock, insurance of stock during the period of storage and storage ; and (c) The ownership of the goods during the period of storage remains with the appellant sugar mills, and on issue of release order from the Government, the Mills are free to sell the sugar to whomsoever they want. 3.1 As per the provision of Section 65 (105) (zza), "taxable s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... release order from the Government they are free to sell the sugar to any customer. In these circumstances, just because the storage period of free sale sugar had to be extended at the behest of the Government of India, neither the Appellant Sugar Mills become "storage or warehouse keeper nor the Government of India become their client in this regard. Storage of a specified quantity of free sale sugar for a specified period to comply with the provisions of the Sugar Development Fund Act, 1982 of the Rules made thereunder can not be treated as, providing "Storage and warehousing service" to the Government of India. 4. In view of the above, the impugned orders in appeal are set aside and while the Appeal No. ST/132 to 136/06 and No. ST/51 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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