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2013 (12) TMI 1124 - CESTAT MUMBAIDemand of service tax - Classification of service - Supply of Tangible Goods for Use Service or storage and warehousing services - Held that:- contract entered into between the appellant and the ONGC is one for supply of vessels on charter hire basis and the operation and control of the vessel remains with the appellant. The vessels are used to store the crude oil produced at Bombay High and also to transport the same to the refineries or to the ports situated in various parts of India. The purpose of production of oil is for its use and since the crude oil is produced offshore, they have to be necessarily transported to refineries situated onshore. Storage of crude oil is only incidental to the main activity of transportation and the vessels are hired only when pumping of crude cannot be made through pipelines laid under the sea bed or in specific weather conditions. Thus, the primary object of charter hiring the vessel is for transportation of crude from the place of production i.e. in the High Sea to the refineries in India and not for "storage and warehousing". Appellant herein, M/s. Shipping Corporation of India, does not provide for security of the goods, nor are they loading or unloading the goods, or stacking the goods, or maintaining the inventory of the goods. As per the agreement, these responsibilities rest with the recipient of the service which is ONGC. Thus, the mother vessels are being used only as temporary storage space apart from transporting the crude oil from Bombay High to refinery situated onshore or other ports in India - Services rendered by the appellant in respect of mother vessels cannot be classified under ‘Storage and Warehousing Services' as defined in Finance Act, 1994 - Appellant have discharged service tax liability under the category of ‘Supply of Tangible Goods for Use Service' as defined under Section 65(105)(zzzzj). Therefore, the tax paid by them has to be appropriated and accounted under the said taxable service - Decided in favour of assessee.
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