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2013 (8) TMI 117 - AT - Service TaxService Tax on C&F Service - Assessee received an amount of ₹ 1,46,05,000/- from M/s Hindustan Lever Ltd. (HLL) for carrying out services of cold storage/clearing and forwarding operations of frozen products. According to department, the said service is chargeable to service tax - Assessee is paying service tax under C&FA service except on the cold storage charges - Cold storage facility is distinct and different for C&F operation and therefore these charges are not liable to be included in taxable value of C&FA services – Held that:- In para 2.1 of the agreement, assessee has agreed to provide cold storage for the purpose of storing and forwarding the frozen products belonging to HLL. In Article 2.13 to 2.29 of the Agreement in view of perishable nature of the goods, assessee is required to maintain specific temperature for storage of frozen goods before dispatching the same as per direction of HLL. Therefore, the storage of the goods in cold storage is an inseparable part of Clearing & Forwarding activity undertaken by the assessee - Since storage of the goods in cold storage is essential part of assessee’s C&F operations, cold storage charges are required to be added in taxable value of C&FA services – Decided against the Assessee. Classification of services under C&FA or under storage and warehouse – Held that:- For classification one has to apply Section 65A(2)(b) of the Finance Act under what services is to be classified under service which gives essential character of the service - Storage of frozen goods in cold storage is an inseparable part of assessee’s activity of clearing & Forwarding operation - Therefore essential character of service is C&FA service and therefore service is classifiable under C&FA service. Limitation – Held that:- For the first time the Revenue wrote a letter dated 27.9.2002 asking assessee to pay tax for the period Sept. 2001 to July 2002. Assessee replied this letter vide their letter dated 8.11.2002 thereafter there was correspondence on 20.11.2002 from the department and replied by assessee on 9.12.2002 - Assessee is not paying duty on cold storage charges was known to department in 2002. Quantum of Cold Storage Charges is already part of agreement and is fixed on monthly basis - Therefore extended period based on suppression of fact cannot be invoked in the present case and therefore demand beyond period of one year is time-barred in the present case – Decided in favor of Assessee.
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