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2015 (11) TMI 902 - CESTAT MUMBAI

2015 (11) TMI 902 - CESTAT MUMBAI - 2016 (41) S.T.R. 908 (Tri. - Mumbai) - Storage or warehouse service - whether proceed of auction of warehoused imported goods in case of importer abandoned the goods, shall be considered as service charges towards storage or warehouse and is liable for service tax - Held that:- Service tax was proposed to be demanded on the sale proceed of the auction of the abandoned imported goods. In the whole transaction no service recipient is existing; therefore there is .....

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nd Board Circular dated 1/8/2002. - there is absolutely no infirmity in the order of the Ld. Commissioner (Appeals), therefore the same has to be sustained. We are therefore upheld the impugned order - Decided against Revenue. - Appeal No. ST/102/12 - Final Order No. A/3578/2015-WZB/STB - Dated:- 13-10-2015 - P S Pruthi, Member (T) And Ramesh Nair, Member (J) For the Petitioner : Shri S L Karoliya, Asstt Commissioner (AR) For the Respondent : Ms Mansi Patil, Consultant ORDER Per Ramesh Nair This .....

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s liable for service tax. 3. Shri S.L. Karoliya, Ld. Asstt. Commissioner (A.R.) appearing on behalf of the Revenue reiterating the grounds of appeal submits that as per Section 150 of the Customs Act, 1962, when the goods is sold by public auction, proceed of any such sale among other payment, charges in respect of goods sold due to the person having custody of the goods, the said proceed is also paid towards storage and warehouse charges. Since, in the present case the respondent retains the pr .....

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not exist, the transaction could not be liable to service tax. For the purpose of service tax it is foremost requirement that there should be service provider and service recipient. Therefore the sale proceed of auction of abandoned goods is not proceed towards providing any service therefore the same is not chargeable to the service tax. She further submits that Ld. Commissioner (Appeals) has rightly dropped the demand relying on the Board Instruction F.No. B 11/1/2002-TRU dated 1/8/2002 wherei .....

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tion 150 provides for distribution of the amount of proceed of auction that will not empowered the government to recover service tax on the auction proceeds. The Ld. Commissioner with proper application of mind given detailed finding not only on the facts but also on the law point of Section 48, 150 of Customs Act, 1962 and also discussed in detail the service tax provision and referred Master Circular dated 23/8/2007 and Board Circular dated 1/8/2002. Findings of the Ld. Commissioners (Appeals) .....

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e and warehousing services in respect of imported cargo through their Container Freight Station and the crux of the demand against the appellants is on the ground that the sole association of the appellants with the abandoned cargo auctioned by them is through the various services provided by them and thus any income earned by the appellants from the auction of such abandoned cargo, after paying the customs duty and other expenses, is gross amount accruing to the appellants in lieu of the storag .....

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ry of storage and warehousing charges through auction of uncleared cargo takes place as a consequence to the non-payment of charges of the storage and warehousing provided by CFS. In such a situation there are two transactions taking place concurrently i.e. (i) the warehousing of the goods of the depositor (importer) in the CFS and (ii) sale of uncleared goods to the (new) buyer by way of auction by the CFS. Section 48 of the Customs Act, 1962 prescribe the procedure in the case of goods not cle .....

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e Government/Customs and balance, if any, shall be paid to the owner of the goods. This is a statutory and mandatory requirement. The retention of such amount by the custodian is expressly with the obligation to refund to the owner of such goods. Both the above said Sections clearly stipulate only sale of goods and make no provision for any service rendered. Section 65(105), Section 66, Section 64(3) and Section 67 of the Finance Act, 1994 make it clear that in order to attract Service Tax, ther .....

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s and the consideration received is without the element of cost of storage and warehousing charges. A sale invoice is generated on the bidder and the goods are delivered after he has paid the full value of the bid amount along with the Sales Tax due thereon. The money realized from the bidder loses the character of a storage and warehousing service' and acquires the status of sale proceeds and becomes subject to Sales Tax. It is for the appellants (custodian of the goods) to apportion the sa .....

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oods and materials sold by the service provider to the recipient of service, from the Service Tax leviable thereon under Section (6) of the Act, subject to the condition that there is documentary proof specifically indicating the value of the said goods and materials. Further, CBEC vide para 36.03 of its Master Circular No. 96/7/2007-ST dated 23/8/2007 has clarified that Service Tax is not leviable on a transaction treated as sale of goods and subjected to levy of Sales Tax/VAT. Whether a given .....

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