TMI Blog2013 (12) TMI 1124X X X X Extracts X X X X X X X X Extracts X X X X ..... ries 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. - ST/315, 628,633 & 634/2012 - Final Order Nos. A/1229-1232/2013-WZB/C-I(CSTB) - Dated:- 4-6-2013 - P R Chandrasekharan And Anil Choudhary, JJ. For the Appellant : Shri Bharat Raichandani, Adv. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalties and hence the appellant is before us. 3. The Ld. Counsel for the appellant makes the following submissions, 3.1 The ONGC charter hires oil tankers for storage and transportation of crude oil from offshore to designated refineries. The crude oil produced at Bombay High is evacuated through tankers and the tankers are an integral part of offshore operations. The tankers are deployed for storage and transportation of crude oil from SBM to refineries. As per the agreement entered into by the appellant with the ONGC, the scope of the work is defined as follows: a) To act as mother vessel and to receive oil produced from Offshore Platforms. b) To transfer crude oil to other vessel/tanker by double banking operation provided such double banking operation carried out as per OCMF Rules and subject to safety and compatibility of the Contract Tanker with another Tanker double banking with her. c) Undertake voyage to discharge port/costal refineries in India. d) Provide lodging and boarding to charter's personnel as and when required by Charter limited to the spare accommodation of the tanker. e) Provide storage on board tanker for charter's equipment/mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Storage and warehousing service for all kinds of goods are provided by public warehouses, private warehouses, by agencies such as the Central ware Housing Corporation, Air Port Authorities, Railways, Inland Container Depots, Container Freight Stations, storage godown and tankers operate by private individuals, etc. The storage and warehousing service provider normally make arrangement for space to keep the goods, loading, unloading and staking of goods in the storage area, keeps inventory of goods, makes security arrangements and provide insurance cover etc. Service provided in ports has already been covered under the category of port service." 3.5 The intention of the legislature was to cover the services provided by agencies such as Central warehousing Corporation, ICDs, Container Freight Stations, airport authorities, railway authorities and so on and the activities sought to be covered included providing space to keep the goods, loading, unloading and stacking of goods in the storage area, keeps inventory of goods, makes security arrangements and provide insurance cover, etc. The said clarification makes it clear that the activity of transportation and storage incidenta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not amount to storage and warehousing service. In view of the above the learned counsel for the appellant prays for allowing the appeals. 4, The learned Commissioner (AR) appearing for the Revenue on the other hand reiterates the findings of the adjudicating authority and submits that out of thirty and odd vessels supplied to ONGC, service tax demand has been made only in respect of ten numbers of "mother vessels". The utility of the mother vessel is that the oil produced in the offshore will be stored in the mother vessel and it will be transported from mother vessels to other ports in India through the daughter vessels. Thus, it is the daughter vessel which will undertake the transportation of goods and not the mother vessels. Since the mother vessels perform the storage of crude oil at the production site, they fall within the definition of storage and warehousing service' and accordingly, the demands have been correctly confirmed. Therefore, he prays for upholding the impugned orders. 5. We have carefully considered the submissions made by both the sides. 5.1 We have perused the contract entered into between the appellant and the ONGC. The contract is one for suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly in accordance with the specifications and operation requirements. It was held that this activity is not that of storage or of a warehouse keeper. 5.3 A similar issue came up for consideration before the Tribunal in the case of Finolex Industries Ltd. (supra). The appellant therein constructed and commissioned two LPG storage tanks and associated equipment for handling LPT gas in order to use the same in the manufacture of final products. For leasing the storage tanks the appellant was receiving a consideration. The Revenue alleged that leasing of storage tanks would come under the purview of Storage and Warehousing Service'. After going through the clarifications given in the CBEC circular dated 01/08/2002, wherein it was clarified that: "It has been stated that in some case a storage owner only rents the storage premises. He does not provide any service such as loading/unloading, stacking, security etc. A point has been raised as to whether service tax would be leviable in such cases. It is clarified that mere renting of space cannot be said to be in the nature of service provided for storage or warehousing of goods. Essential test is whether the storage keeper provides ..... X X X X Extracts X X X X X X X X Extracts X X X X
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