Custom, Excise & Service Tax Tribunal
Punjab State Warehousing Corporation vs Chandigarh-Ii on 6 January, 2025
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
REGIONAL BENCH - COURT NO. I
Service Tax Appeal No. 50554 of 2015
[Arising out of Order-in-Original No. 47/ST/CHD-II/2014 dated 19.11.2014 passed
by the Commissioner of Central Excise, Chandigarh-II]
M/s Punjab State Warehousing ......Appellant
Corporation
Mansa, Punjab
VERSUS
Commissioner of Central Excise, ......Respondent
Chandigarh-II Central Revenue Building, Plot No. 19, Sector 17-C, Chandigarh 160017 WITH Service Tax Appeal No. 50557 of 2015 (Punjab State Warehousing Corporation, Bathinda, Punjab) [Arising out of Order-in-Original No. 46/ST/CHD-II/2014 dated 19.11.2014 passed by the Commissioner of Central Excise, Chandigarh-II] Service Tax Appeal No. 50558 of 2015 (Punjab State Warehousing Corporation, Patiala, Punjab) [Arising out of Order-in-Original No. 48/ST/CHD-II/2014 dated 19.11.2014 passed by the Commissioner of Central Excise, Chandigarh-II] Service Tax Appeal No. 50559 of 2015 (Punjab State Warehousing Corporation, Sangrur, Punjab) [Arising out of Order-in-Original No. 49/ST/CHD-II/2014 dated 19.11.2014 passed by the Commissioner of Central Excise, Chandigarh-II] Service Tax Appeal No. 60053 of 2016 (Punjab State Warehousing Corporation, Mansa, Punjab) [Arising out of Order-in-Original No. 04/ST/CHD-II/2016 dated 02.02.2016 passed by the Commissioner of Central Excise, Chandigarh-II] Service Tax Appeal No. 60055 of 2016 (Punjab State Warehousing Corporation, Patiala, Punjab) [Arising out of Order-in-Original No. 05/ST/CHD-II/2016 dated 02.02.2016 passed by the Commissioner of Central Excise, Chandigarh-II] 2 ST/50554/2015 and 10 more Service Tax Appeal No. 60056 of 2016 (Punjab State Warehousing Corporation, Bathinda, Punjab) [Arising out of Order-in-Original No. 03/ST/CHD-II/2016 dated 02.02.2016 passed by the Commissioner of Central Excise, Chandigarh-II] Service Tax Appeal No. 60346 of 2017 (Punjab State Warehousing Corporation, Sangrur, Punjab) [Arising out of Order-in-Original No. 4/ST/CHD-II/2017 dated 31.01.2017 passed by the Commissioner of Central Excise, Chandigarh-II] Service Tax Appeal No. 60348 of 2017 (Punjab State Warehousing Corporation, Bathinda, Punjab) [Arising out of Order-in-Original No. 3/ST/CHD-II/2017 dated 31.01.2017 passed by the Commissioner of Central Excise, Chandigarh-II] Service Tax Appeal No. 60349 of 2017 (Punjab State Warehousing Corporation, Mansa, Punjab) [Arising out of Order-in-Original No. 2/ST/CHD-II/2017 dated 31.01.2017 passed by the Commissioner of Central Excise, Chandigarh-II] Service Tax Appeal No. 60350 of 2017 (Punjab State Warehousing Corporation, Patiala, Punjab) [Arising out of Order-in-Original No. 5/ST/CHD-II/2017 dated 31.01.2017 passed by the Commissioner of Central Excise, Chandigarh-II] APPEARANCE:
Shri Joy Kumar, Advocate for the Appellants Shri Siddharth Jaiswal and Shri Narinder Singh, Authorized Representatives for the Respondent CORAM: HON'BLE Sh. S. S. GARG, MEMBER (JUDICIAL) HON'BLE Sh. P. ANJANI KUMAR, MEMBER (TECHNICAL) FINAL ORDER NO. 60002-60012/2025 DATE OF HEARING: 06.01.2025 DATE OF DECISION: 06.01.2025 S. S. GARG :
These 11 appeals are directed against different impugned orders passed by the Commissioner of Central Excise, Chandigarh-II, whereby the learned Commissioner has confirmed the demand of service tax along with interest and penalties against the appellant
3 ST/50554/2015 and 10 more under the category of „renting of immovable property service‟. Since the issue involved in all the appeals is identical, therefore, all the appeals are taken up together for discussion and decision. For the sake of convenience, the facts of the Appeal No. ST/50554/2015 are taken up as a lead case.
2. Briefly stated facts of the present case are that the appellant is a State Government Undertaking of Punjab set up for storage of food grains under the aegis of Warehousing Corporation Act, 1962 to acquire and built warehouses at suitable places for storage of agricultural produce, seeds, manures, fertilizers, agricultural implements and notified commodities by individual co-operative societies and other institutions. The appellant is providing „storage and warehousing services‟ to the Food Corporation of India (in short "FCI") mainly for storage of agriculture produce. On the basis of audit of the records of FCI, the department formed an opinion that the appellant had provided service under the category of „renting of immovable property service‟ on which service tax was levied w.e.f. 01.06.2007 instead of „storage and warehousing services‟ as defined under clause (zzza) of sub-section (05) of Section 65 of the Finance Act, 1994. On these allegations, show cause notices were issued calling upon the appellant as to why service tax should not be recovered from them under Section 73 alongwith interest under Section 75 and penalties under Sections 76, 77 & 78 of the Finance Act, 1994. The appellant filed detailed replies to show cause notices denying their liability to the action as proposed in show cause notices. After following the due process, by way of various Orders-in-Original, 4 ST/50554/2015 and 10 more the learned Commissioner confirmed the demand of service tax under Section 73 alongwith interest under Section 75 and also imposed penalty of Rs.10,000/- under Section 77 and equivalent penalty under Section 78 of the Finance Act, 1994. Hence, the present appeals.
3. Heard both the parties and perused the material on record. 4.1 The learned Counsel for the appellant submits that the impugned orders are not sustainable in law and are liable to be set aside as the same have been passed contrary to the facts and the law; and binding judicial precedents on the identical issue in the appellant‟s own case.
4.2 He further submits that this issue is no more res integra as this Tribunal in the appellant‟s own cases for the previous periods has allowed the appeals of the appellant and has set aside the demand of service tax under the category of „renting of immovable property service‟. In this regard, he relies on following three orders of the Tribunal passed in appellant‟s own cases in favour of the appellant:
Punjab State Warehousing Corporation vs. CCE, Chandigarh-II - Final Order No. 60065-60067/2018 dated 30.01.2018 Punjab State Warehousing Corporation vs. CCE, Chandigarh-II - Final Order No. 63155-63156/2018 dated 07.09.2018 Punjab State Warehousing Corporation vs. CCE, Chandigarh-II - Final Order No. 61103/2019 dated 06.09.2019
5 ST/50554/2015 and 10 more 4.3 The learned Counsel prays that as the issue involved in these present appeals is identical, therefore, the earlier orders of the Tribunal (cited supra) should be followed and in view of those orders, the present appeals should also be allowed and impugned orders should be set aside.
5. On the other hand, the learned Authorized Representative for the department submits that the earlier orders of the Tribunal in the appellant‟s own cases (cited supra) have been appealed against before the Hon‟ble Punjab & Haryana High Court but there is no stay granted by the Hon‟ble High Court staying the operation of those orders.
6. We have considered the submissions made by both the parties and perused of the material on record as well as the decisions relied upon by the appellant in their own cases for previous periods. Consequently, we are of the view that the appellant is not liable to pay service tax under the category of „renting of immovable property service‟. Here it is pertinent to reproduce the relevant findings of the Tribunal in the appellant‟s own case decided vide Final Order No. 60065-60067/2018 dated 30.01.2018, which are reproduced herein below:
"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.
6 ST/50554/2015 and 10 more
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:
7 ST/50554/2015 and 10 more
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) (zzza) of the Finance Act, 1994.
8 ST/50554/2015 and 10 more
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."
7. Similarly, the Tribunal vide its Final Order No. 63155- 63156/2018 dated 07.09.2018 has allowed the appeals of the appellant by setting aside the impugned orders. Similarly, vide Final Order No. 61103/2019 dated 06.09.2019, again the Tribunal has set aside the demand of service tax under the category of „renting of immovable property service‟ and has decided the appeal in favour of the appellant by setting aside the impugned order.
8. By respectfully following the ratios of the above cited decisions of the Tribunal in the appellant‟s own cases, we set aside the impugned orders and allow all the appeals of the appellant with consequential relief, if any, as per law.
(Operative part of the order pronounced in the open court) (S. S. GARG) MEMBER (JUDICIAL) (P. ANJANI KUMAR) MEMBER (TECHNICAL) RA_Saifi