Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise & ... vs M/S Preeti Logistics on 1 October, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. ST/65/12 (Arising out of Order-in-Appeal No. US/355-356/RGD/2011 dated 20.10.2012 passed by the Commissioner of Central Excise (Appeals), Mumbai-II). For approval and signature: Honble Shri M.V. Ravindran, Member (Judicial) Honble Shri C.J. Mathew, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== Commissioner of Central Excise & Service Tax, Raigad Appellant Vs. M/s Preeti Logistics Respondent Appearance: Shri S.R. Nair, EO (AR) for Appellant Shri S.P. Sheth, Advocate for Respondent CORAM: SHRI M.V. RAVINDRAN, MEMBER (JUDICIAL) SHRI C.J. MATHEW, MEMBER (TECHNICAL) Date of Hearing: 01.10.2015 Date of Decision: 01.10.2015 ORDER NO. Per: M.V. Ravindran
This appeal is directed against Order-in-Appeal No. US/355-356/RGD/2011 dated 20.10.2012 passed by the Commissioner of Central Excise (Appeals), Mumbai-II.
2. Heard both sides and perused the records.
3. On perusal of the records, we find that the issue involved in this case is regarding the Service Tax liability in relation to the auctioning of abandoned cargo. The main allegation against the respondent is that the excess amount recovered over and above the amount against the cargo auction is pretend by them and shown in the Income side of their Balance-sheet. This can amount to rendering of storage and warehousing services. We find that this issue is no more res integra as this Bench in the case of Gateway Distri Parks Ltd. Vs. Commissioner of Central Excise, Raigad 2013-TIOL-2210-CESTAT-MUM, which held that such amount is not taxable under storage and warehousing services. We reproduce the relevant paragraphs: -
5. The appellant M/s Gateway Distri Packs Ltd are providing services under the Cargo Handling, Storage and Warehouse, Business Support and Goods Transport Agency under the provisions of Chapter V of the Finance Act, 1994 and the Service Tax Rules, 1994. A Show Cause Notice was issued to the appellant on the ground that normally after receipt of the consignments and complying with the necessary customs formalities and payment of various duties, duties and taxes, the importer or their representative take delivery of the imported consignments from the appellant. The appellants are paying appropriate service tax in this regard. However, in some cases, the importers failed to turn up to take delivery of the consignments. In such cases as per the provisions of Customs Act, after waiting for a period of 30 days the appellant could dispose of the goods imported goods by conducting auction. After such auction is conducted and the various Government dues and expenditure incurred on account of auction are paid, the appellant retains the surplus amount realized from the auction. Such amounts are shown in their Balance-sheet as income. The Revenue is of the view that the appellants are liable to pay service tax on such amounts as income accruing to the appellant on account of various services provided by the appellant. The demands were made under the category of Storage and Warehousing Service.
6. We find that this issue is now settled by the Tribunal in the case of Maersk India Pvt. Ltd. vs. CCE & C, Raigad reported in - 2012-TIOL-840-CESTAT-MUM whereby the Tribunal after relying upon the Board's Circular No. 11/1/2002-TRU dated 01.08.2002 and the decision in the case of Mysore Sales International Ltd vs. Assistant Commissioner of Central Excise, ST Bangalore reported in 2011 (22) STR 30 = 2011-TIOL-741-CESTAT-BANG and the decision of the Tribunal in the case of India Gateway Terminal Pvt Ltd vs. CCE, Cochin reported in 2010 (20) STR 338 =2010-TIOL-1265-CESTAT-BANG set aside the demands which were confirmed on the same ground. The Tribunal in Maersk India Pvt. Ltd. vs CCE supra held as under:
"4. The counsel for the appellant submits that in Board's Circular No. 11/1/2002-TRU dated 01/08/2002 it has been clarified that Service Tax is not leviable on the activities of the custodian when he auctions abandoned cargo and VAT/ST is paid in respect of such cargo. Further, in the case of Mysore Sales International Ltd. Vs. Asstt. Commissioner of Central Excise, ST Div., Bangalore reported in 2011 (22) STR 30 (Tri-Bang) = 2011-TIOL-741-CESTAT-BANG and India Gateway Terminal (P) Ltd. Vs. Commissioner of Central Excise, Cochin reported in 2010 (20) STR 338 (Tri-Bang) = 2010-TIOL-1265-CESTAT-BANG, this Tribunal had held that Service Tax is not payable by custodians when they undertake auctioning and sale of uncleared cargo.
5. The learned A.R. appearing for the revenue reiterates the findings given in the Order-in-Original.
6. We have considered the rival submissions. Taking into account the Board's Circular and decisions of the Tribunal (cited supra), after waiving the requirement of pre-deposit, we have taken the appeal itself for final disposal.
7. As discussed above, that the Board Circular No.11/1/2002-TRU dated 01/08/2002 has clarified that Service Tax is not leviable on the activities of the custodian where he auctions abandoned cargo and ST/VAT is paid in respect of that cargo and the same view has been taken by this Tribunal in the case of Mysore Sales International Ltd. (supra) and India Gateway Terminal (P) Ltd. (supra), following the ratio of the cited decisions, we set aside the impugned order and allow the appeal with consequential relief (if any)."
7. In view of the above decisions, the impugned order whereby the demands are confirmed on the same ground are set aside and the appeal filed by M/s Gateway Distri Park Ltd are allowed.
4. Learned AR relies upon the judgment of the Hon'ble High Court of Delhi in the case of Associated Container Terminals Ltd. Vs. Union of India 2008 (226) ELT 169 (Del) for the proposition that any amount which is recovered by auctioning towards the warehouse charges. We find that the ratio of the said case law will not be applicable in the case in hand in the issue regarding liability to pay the customs duty on the warehouse charges recovered by the CFS.
5. We also find that on an identical issue in the case of Central Warehousing Corporation - 2015-TIOL-2020-CESTAT-MUM has considered the same issue and in paragraph No. 3, 4 & 5 held as under: -
3. On perusal of the records, we find that the issue involved in this case is regarding taxability of an amount received by the appellant herein, who is a Container Freight Station (CFS) on the goods auctioned by them. The said goods were abandoned by the importers and the said goods were auctioned as per the provisions of Customs Act, 1962 and after discharging all the duties as per Section 150 of the Customs Act, 1962, the appellant retained an amount, which was to be returned to the importer. It is the case of the Revenue that on this amount, service tax liability arises under the category of storage and warehousing.
4. We find that the issue is no more res integra as this bench in the case of Maersk India Pvt. Ltd. vs. CCE & C, Raigad reported in 2013 (29) STR 170 (Tri-Mum) = 2012-TIOL-840-CESTAT-MUMhas relied upon the Board's Circular, as well as, the view taken in the case of Mysore Sales International ltd., vs. Asst. CCE & ST, Bangalore reported in 2011 (22) STR 30 (T) = 2011-TIOL-741-CESTAT-BANG held in favour of appellant/assessee therein. We respectfully reproduce the entire judgement of Maersk India Pvt. Ltd:
"These appeal and stay application are directed against the Order-in-Original No: 11/SR(11)COMMR/RGD/09-10 dated 21/01/2010 passed by the Commissioner of Service Tax, Raigad.
2. After hearing both sides, we find that the appeal itself can be disposed of at this stage. Therefore, after granting waiver of pre-deposit, we take the appeal itself for disposal.
3. Vide the impugned order, the Commissioner has confirmed Service Tax demands of Rs.94,02,497/- and also imposed equivalent penalties under Section 78 apart from the penalty under Section 76 of the Finance Act, 1994. The Service Tax demand pertains to the period October, 2003 to September, 2008 from the appellant. The appellant was running a container freight station and was functioning as custodian of the bonded warehouses under the provisions of the Customs Act. In respect of unclear cargo, they had undertaken auction of the goods. The demand of Service Tax is on the income received from the sale of uncleared cargo after meeting the various expenses incurred under the category of "Cargo Handling Services and "Storage & Warehousing Services.
4. The counsel for the appellant submits that in Board's Circular No. 11/1/2002-TRU dated 01/08/2002 it has been clarified that Service Tax is not leviable on the activities of the custodian when he auctions abandoned cargo and VAT/ST is paid in respect of such cargo. Further, in the case of Mysore Sales International Ltd. Vs. Asstt. Commissioner of Central Excise, ST Div., Bangalore reported in 2011 (22) STR 30 (Tri-Bang) = 2011-TIOL-741-CESTAT-BANG and India Gateway Terminal (P) Ltd. Vs. Commissioner of Central Excise, Cochin reported in 2010 (20) STR 338 (Tri-Bang) = 2010-TIOL-1265-CESTAT-BANG, this Tribunal had held that Service Tax is not payable by custodians when they undertake auctioning and sale of uncleared cargo.
5. The learned A.R. appearing for the revenue reiterates the findings given in the Order-in-Original.
6. We have considered the rival submissions. Taking into account the Board's Circular and decisions of the Tribunal (cited supra), after waiving the requirement of pre-deposit, we have taken the appeal itself for final disposal.
7. As discussed above, that the Board Circular No.11/1/2002-TRU dated 01/08/2002 has clarified that Service Tax is not leviable on the activities of the custodian where he auctions abandoned cargo and ST/VAT is paid in respect of that cargo and the same view has been taken by this Tribunal in the case of Mysore Sales International Ltd. (supra) and India Gateway Terminal (P) Ltd. (supra), following the ratio of the cited decisions, we set aside the impugned order and allow the appeal with consequential relief (if any).
5. In view of the foregoing, the facts are being very same in the case involved, we are of the view that the impugned order is not sustainable and the impugned order is liable to set aside and we do so.
6. In view of the foregoing, we find that the appeal filed by the Revenue is devoid of merits and the same is rejected. We hold that the impugned order is correct and legal and does not suffer from any infirmity.
(Pronounced in Court)
(C.J. Mathew) (M.V. Ravindran)
Member (Technical) Member (Judicial)
Sinha
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Appeal No. ST/65/12