The CESTAT Bangalore in M/s. Hindustan Petrochemical Corporation Ltd v. Commissioner of Central Excise (Appeals) held that Maintenance and Safety of Tank Trucks cannot be considered to be a service within the scope of “Technical Inspection and Certification Service” under Section 65 of the Finance Act, 1994 and it is not subject to Service Tax.
In the instant case, the petitioner M/s HPCL Ltd. is a Govt. of India undertaking engaged in the business of refining of crude and marketing of petroleum products. When it’s LPG tank trucks require any repair or mandatory testing of safety valves, tanks are cleaned and completely degassed. For this activity, the appellant collects costs of water, LPG and labour charges from truck owners. The department contented that the activity conducted by the appellant falls under the heading “Technical Inspection and Certification Service”. A show cause notice was issued and confirmed by order holding that any repair to truck has to be conducted with the advance approval in writing and repair work has to be conducted as per code IS2825/BS5500, and only competent contractors approved by CCOE could provide the service. The CIT(A) had upheld the entire demand of service tax and the appellant has preferred an appeal against the same.
The CESTAT held that though appellants are performing certain activities in relation to maintenance and safety of the tank trucks and are issuing certificates that the tanks are purged or degrassed, the same cannot be considered to be service within the scope of “Technical Inspection and Certification Service” . It added that appellants are not an agency performing testing, certification etc. and even though they are performing certain activities which make the truck tanks fit to be filled with lPG for further transportation, they have not fulfilled the condition so as to impart the activity of puging and degrassing tank truck as “Technical Inspection and Certification Service”.
