Custom, Excise & Service Tax Tribunal
Punjab State Warehousing Corporation vs Cce, Chandigarh on 30 January, 2018
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
SCO 147-148, SECTOR 17-C, CHANDIGARH-160017
DIVISION BENCH
Court-I
Appeal No.ST/57108,57341 & 58260/2013
(Arising out of OIO No.09/ST/CHD-II/2013 dt.30.1.2013, OIO No.12/ST/CHD-II/2013 dt.22.2.2013 and OIO No.27/ST/CHD-II/2013 dt.25.3.2013 passed by the CCE, Chandigarh-II)
Date of hearing/Decision:30.01.2018
Punjab State Warehousing Corporation Appellant
Vs.
CCE, Chandigarh Respondent
Present for the Appellant: Shri Joy Kumar, Advocate Present for the Respondent: Shri Atul Handa, AR Coram: Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr.Devender Singh, Member (Technical) FINAL ORDER NO. 60065-60067/2018 PER: ASHOK JINDAL The appellants are in appeal against the impugned order wherein the demand of service tax along with interest has been 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 for storage of food grains. The case of the department is that the activity of letting out 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 appropriately 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. Ld.Counsel appearing for the appellant submits that the appellant is engaged in the activity of providing of storage of agricultural produce to FCI. Apart from storage, the appellant is insuring the goods stored in the godown. The appellant is also keeping record thereof and as per rate fixed for payment of storage charges, the appellant is required to provide various services like, sheds, light, electricity, etc. Therefore, the activity undertaken by the appellant is appropriately come under storage and warehousing of agricultural produce and storage of agricultural produce has been exempted from the service tax as per section 65 (105 (zza) of the Finance Act, 1994, therefore, are not liable to pay service tax.
4. On the other hand, learned AR supported the impugned order and submits that the appellant did not produce documents in support of their claim before the adjudicating authority. On the basis of whatever documents were produced by the appellant it could not ascertain whether the appellant has provided storage and warehousing services, therefore the activity undertaken by the appellant is appropriately fall under the category of renting of immovable property service in terms of section 65 (105 (zzzz) of the Finance Act, 1994.
5. Heard the parties and considered the submissions.
6. 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 the provisions of Punjab Warehouse Act, 1957 and Rules 1958 and payment of such charges shall be borne by the FC.
7. Further, we find that the letter issued by the District Manager of Punjab State Warehousing Corporation to the FCI. For better appreciation, we reproduce the copy of the certificate provided by the appellant:-
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 for 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.
(dictated and pronounced in the court)
(DEVENDER SINGH) (ASHOK JINDAL)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
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