Custom, Excise & Service Tax Tribunal
Punjab State Warehousing Corporation vs Chandigarh-Ii on 7 September, 2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SCO 147-148, SECTOR 17-C, CHANDIGARH - 160 017
COURT NO. I
APPEAL NO. ST/56307,56579/2013
[Arising out of Order-in-Appeal No. 103-104/ST/CHD-II/2012 dated
06.12.2012 passed by the Commissioner of Central Excise (Appeals),
Chandigarh]
Date of hearing/decision: 07.09.2018
For approval and signature:
Hon'ble Mr. Ashok Jindal, Member (Judicial)
Hon'ble Mr. Bijay Kumar, Member (Technical)
M/s Punjab State Warehousing : Appellant(s)
Corporation
VS
C.C.E., - Chandigarh-II : Respondent(s)
Appearance:
Present for the Appellant(s):Shri Joy Kumar (Advocate) Present for the Respondent(s): Shri G.M. Sharma (AR) CORAM:
Hon'ble Mr. Ashok Jindal, Member (Judicial) Hon'ble Mr. Bijay Kumar, Member (Technical) FINAL ORDER NO. 63155-63156/2018 Per : Ashok Jindal The appellants are in appeal against the impugned order wherein the demand of service tax along with interest has been 2 APPEAL NO. ST/56307-56579/2019 confirmed against the appellant under the category of renting immovable of property service.
2. The facts of the case are that the appellant is an undertaking of the Government of Punjab and owner of warehouses which have been rented by them to the Food Corporation of India of storage for food grains. The case of the department is that the activity of letting out of warehouses to FCI would attract service tax under Section 65 (105 (zzzz) of the Finance Act, 1994 as renting of immovable property for business or commerce. On these allegations, the show cause notices were issued to the appellants to demand service tax under the category of renting immovable of property service. The show cause notices were contested by the appellant on the ground that the activity undertaken by the appellant is appropriated fall under the category of storage and warehousing in terms of Section 65 (105 (zza) of the Finance Act, 1994 but the adjudicating authority has held that the activity undertaken by the appellant is appropriately qualify under the category of renting immovable of property service. Accordingly, the impugned orders have been passed to demand service tax along with interest and imposition of various penalties upon the appellants. Against the said orders, the appellants are before us.
3. The Ld. Counsel for the appellant submits that in their own case for the earlier period for vide final order no. 60065-60067/2018 dated 30.01.2018, the matter came up before this Tribunal and this Tribunal observed that the appellant is not required to pay service tax for their activity, therefore, the impugned orders are to be set aside. 3 APPEAL NO. ST/56307-56579/2019
4. Heard the parties.
5. Considering the fact that in appellant's own case for the earlier period this Trubunal observed as under:
"We have gone through the terms of agreement. The para 2 of the terms of agreement is reproduced below:
"2. a) The PSWC agree to offer owned/hired/godown capacity on rental basis to FCI on demand at various stations in the state of Punjab on General Hiring basis (GHB) on year to year guarantee utilization, further extendable on year to year basis with mutual consent.
b) The PSWC agree to keep the godowns storage worthy and ready for acceptance of the stocks of FCI at all the time during the currency of agreement.
C) The PSWC agree to get the stocks of FCI insured against the risk of flood, fire, theft and burglary during the currency of the contract, however no insurance would be obtained/arranged in the case of loss due to the natural calamities, natural disasters and civil commotion and earthquake etc. The instance cover against these risks would, however, be arranged by PSWC on the request of the FCI well in advance in accordance with provisions of Punjab Warehouse Act, 1957 and Rules 1958 and payment of such charges shall be borne by the FC.''
8. Further, we have seen that FCI has fixed the rates payable to the appellant for providing various services.
For better appreciation, the rates are produced below:
9. On going through the documents produced before us, which are extracted hereinabove, the appellants are engaged in the activity of providing of space for storage and warehousing as well as keeping the records thereof and providing insurance & security service. As the appellant is providing various other services apart from the space for storage, therefore, the services appropriately fall under the category of Storage and Warehousing Services. Further, as these services are not agricultural produce, which is not in dispute, therefore, the appellant is not liable to pay service tax on Storage and Warehousing which has been exempted from service tax as per section 65 (105) zza) of the Finance Act, 1994.
10 In view of the above, the appellant is not required to pay service tax on their activity. Accordingly, we set aside the impugned order and allow the appeals with consequential relief.4 APPEAL NO. ST/56307-56579/2019
As issue is settled in favour of appellant, therefore, the impugned orders are to be set aside and we allow the appeals with consequential relief.
(Order dictated and pronounced in the open court) Bijay Kumar Ashok Jindal Member (Technical) Member (Judicial) Kailash