2017 (12) TMI 13 - AT - Service Tax

Classification of services - whether hiring of the foreign vessels for transportation of petroleum product imported by the respondent on time chatters basis falls under the taxable category of Supply of Tangible Goods for Use ? - Held that - the issue is held in favor of the respondent by the Tribunal in the case of PETRONET LNG LTD Versus COMMISSIONER OF SERVICE TAX 2013 (11) TMI 1011 - CESTAT NEW DELHI holding that those transactions fall within the ambit of the exclusionary clause of Section 65 (105)(zzzzj) of the Finance Act and are therefore immune to the liability of service tax - however In view of the fact that the order dated 24.10.2013 passed by this Tribunal in earlier occasion in respect of the same dispute in the case of the respondent has not been stayed or over-ruled contrary view cannot be taken by the Tribunal in deciding the present appeal and the Principles decided therein can be adopted for deciding the issue in hand. The transactions made by the respondent will not fall under the scope and ambit of Supply of Tangible Goods for use service - appeal dismissed - decided against Revenue.

Summary

Issues:
- Classification of services under "Supply of Tangible Goods Service"
- Liability of the respondent to pay Service Tax
- Previous Tribunal's decision and its impact on the current appeal

Analysis:

1. Classification of services under "Supply of Tangible Goods Service":
The appeal revolves around the classification of services provided by the respondent under the category of "Supply of Tangible Goods Service." The Department contended that the chartering of foreign vessels for transporting petroleum products falls under this taxable category, making the respondent liable to pay Service Tax. However, the Tribunal referred to a previous final order dated 24.10.2013, which held that such transactions are excluded from the liability of service tax under Section 65(105)(zzzzj) of the Finance Act. Both parties confirmed that this previous order had not been stayed or overruled by a higher judicial forum. As a result, the Tribunal maintained that the principles established in the earlier decision should guide the current appeal, leading to the dismissal of the Revenue's appeal.

2. Liability of the respondent to pay Service Tax:
The Department had issued a show cause notice seeking confirmation of the service tax demand and penalties for non-payment. However, the adjudicating authority dropped the demand based on the previous Tribunal's order in favor of the respondent. The Revenue argued that the services received by the respondent were rightly classifiable under the taxable category of supply of tangible goods service. Nonetheless, the Tribunal upheld the earlier decision, stating that the respondent's transactions did not fall under this service category, thereby rejecting the Revenue's appeal.

3. Previous Tribunal's decision and its impact on the current appeal:
The Tribunal emphasized the importance of consistency in decisions and the binding nature of its previous final order in a similar dispute involving the respondent. Since the earlier order had not been stayed or overruled, the Tribunal concluded that it must adhere to the principles established in that decision. This approach ensured that a contrary view could not be taken in the current appeal, leading to the dismissal of the Revenue's appeal and the disposal of the miscellaneous application.

In conclusion, the Tribunal's judgment in this case reaffirmed the legal position established in a previous decision, resulting in the dismissal of the Revenue's appeal against the respondent.