Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

Comments

Print   |    |  Comment

PJ/CASE LAW/2015-16/2732

Control over goods is crucial test for classification under ‘Storage & Warehousing Services.’

Case:-INOX AIR PRODUCTS LTD. VERSUSCOMMISSIONER OF CENTRAL EXCISE, RAIGAD
 
Citation:-2015 (38) S.T.R. 179 (Tri. - Mumbai)

Brief facts:-The appellants are in appeals against the impugned order wherein Service Tax demand has been confirmed against them for the period 16-8-2002 till March 2012 under the category of Storage and Warehousing Services.
The brief facts of the case are that the appellant is engaged in the manufacture and sale of liquid, oxygen, nitrogen, argon etc. which is to be stored in temperature of Minus(-) 269°C. Therefore, the customers who are using these gases are not having the storage facilities. The appellant is providing storage tank to their customers for storage of gas. The appellant is charging rent for usage of the storage tank, the appellant is also maintaining these storage tank i.e. wear and tear of these tanks are ensured by the appellant. The appellant is paying Central Excise duty as well as VAT on the rent portion charged from the customers. Revenue is of the view that the rent charged by the appellant for renting out the storage tank to their customer fall under the category of ‘Storage and Warehousing Services’ as per Section 65(102) of the Finance Act, 1994 therefore, impugned proceedings were initiated against the appellant and impugned demands have been confirmed by way of the impugned orders. The appellant is in challenge against the said orders before Tribunal.
 
Appellant’s contention:-The ld. Chartered Accountant appearing on behalf of the appellant submits that the appellant is merely renting storage tank and they are not storage and warehousing keeper. The control of the storage tank is with the buyer only. As per the taxability under Section 65(105) of the Finance Act, 1994, the appellant should provide storage and warehousing facility to their customer and the essential test is that they should provide the security of goods, tracking, loading and unloading of the goods in storage area. He, further submits that as the goods are not in their control, they are not maintaining any inventory of the said goods, therefore, they are not liable to pay Service Tax under the category of ‘Storage and Warehousing Services’. It is further contented that as the appellant has taken into consideration the rent charge on storage tank in the assessable value of the excisable goods. Therefore, double levy of duty cannot be imposed on them. In these circumstances, it is prayed that impugned orders to be set aside. He also took the support of the decision of this Tribunal in the case of Indian Oil Corporation Ltd.v. Commissioner of Central Excised, Goa - 2014-TIOL-729-CESTAT-MUM = 2014 (35)S.T.R.431 (Tri. - Mumbai).
 
Respondent’s contention:-Ld. A.R. opposed the contention of the ld. Chartered Accountant and submits that in this case the storage tank is well within the control of the appellant, as they are responsible for wear and tear of the storage tank and they have insured the storage tank therefore, storage tank is in control of the appellant. In these circumstances, they are covered under the category of Storage and Warehousing Services as defined under Section 65(102) of the Finance Act, 1994. In these circumstances, they are required to pay service on their activity.
 
Reasoning of judgement:-In this case to decide the taxability of service, the real test is that, when the goods have been passed on to the customer. From the facts of the case, it is emerging that the gas in the storage tank installed at the place of buyer and the goods transferred to the buyer. Therefore, there is no control of the appellant on the goods in storage tank, after gas is stored in the tank the whole responsibility of the goods is with the buyer only. In these circumstances, as the appellant is not having any control over the goods and they are not responsible for the security of the goods, the appellant is not covered under the category of Storage and Warehousing Services as defined under Section 65(102) of the Finance Act, 1994.
With these observations, they set aside the impugned orders and allow the appeals with consequential relief if any.

Decision:-Appeals allowed.

Comment:- The analogy of the case is that mere collection of rent of storage tanks without effective control over the goods is not taxable under the category of ‘Storage and Warehousing Services’. Assessee had no control on gas stored in storage tank, and it was whole responsibility of buyer only. As assessee was not responsible for security of goods, they were not liable to Service Tax under category of Storage and Warehousing Services. Hence assessee is not liable to pay service tax.

Prepared by:- Monika Tak
 

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com