The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) held that storage and warehouse services in relation to food are exempt from the purview of service tax.
In this case, the appellant, M/s. Bihar State Warehousing Corporation, Patna, is involved in providing the service falling within the “storage and storage facility services. The appellant had been registered under the category of ‘GTA service’.
Know How to Investigate Books of Accounts and Other Documents, Click Here
Examining the appellant’s ST-3 forms from April 2003 to March 2008, it was discovered that the appellant had failed to pay the proper service tax for the categories of storage and warehousing service and GTA service. Thus, a Show Cause Notice (SCN) was issued, demanding a total service tax of Rs. 6.6 crore.
The notice was adjudicated, and the commissioner confirmed the demand for service tax of Rs. 6,60,85,211, along with interest and penalty, was also imposed under Section 78 of the Finance Act, 1994, and a penalty of Rs. 1000 under Section 77 of the Finance Act, 1994.
Aggrieved by the above order, the appellant approached CESTAT for relief.
Know How to Investigate Books of Accounts and Other Documents, Click Here
It was contended by the appellant that they had received food grains from various sources, stored the same in their warehouses, and later distributed it to other public sector units, such as FCI, IFFCO, etc. It was submitted that, under Section 65 (102) of the Finance Act, 1994, the definition of storage and warehousing does not include any service provided for storage of agricultural produce or any service provided by cold storage.
The appellant also submitted that the amount of Rs. 1,33,96,302/- was confirmed under the category of storage, and warehousing is not sustainable.
Know How to Investigate Books of Accounts and Other Documents, Click Here
The CESTAT bench observed that the storage of food grains has been clearly excluded from the definition of ‘storage and warehousing service’ as defined under Section 65(102) of the Finance Act, 1994.
The CESTAT bench, comprising Ashok Jindal, Member (Judicial), and K. Anpazhakan, Member (Technical), held that the demand of service tax amounting to Rs. 1,33,96,302/- confirmed in the impugned order under the category of ‘storage and warehousing service’ is not sustainable.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
