TMI Blog2007 (8) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... State Beverages Corporation Ltd., Bangalore, are engaged in the activity of purchasing and selling Liquor in terms of the licence issued to them by the Karnataka Govt. Revenue conducted certain investigations and came to the conclusion that the appellant provided the services of the storage of goods which are taxable under the category of Storage and Warehousing Services in terms of the Finance Act, 1994. Therefore, Revenue proceeded against the appellants proposing demand of the Service Tax and also the penal provisions. The Adjudicating Authority passed the impugned order. He confirmed an amount of Rs. 65,47,829/- being the Service Tax payable by the appellant on the total value of the taxable service .rendered by them for the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation (KSWHC), Central Warehousing Corporation (CWC) and other private godowns. The liquor, which has been purchased from the various manufacturers/distilleries, is stored in the storage godowns. Afterwards, the liquor is sold to various wholesalers who are holding appropriate licenses from the Karnataka State Govt. It is seen from the agreement that the appellants actually purchase liquor and then later, they are sold. This is very clear from the Agreement entered by the appellant with the distilleries. However, if the liquor sold is not lifted within 90 days, the appellant- Corporation charges a demurrage fee of Rs. 2/- per day from the manufacturer. It is not very clear as to why this fee is charged from the manufacturers because once th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the storage and warehousing services. Therefore, he confirmed the demand and levied various penalties for non-compliance of the Service Tax provisions. The appellants forcefully argued that they actually do not render any storage services to anyone. Their point is that they, actually, are in the business of purchasing and selling liquor. Therefore, the appellants actually hired the storage base from the various corporations like KSWHC, CWC, certain private godowns etc. in order to store the liquor purchased by them. It cannot be said that the appellants render storage services to themselves. The appellants purchase liquor. They have to be stored. In order to store them, they hire various storage bases and they incur expenditure in conne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tancy, conceal profit or show loss and the entries made by him cannot therefore be regarded as conclusive one way or the other. What is necessary to be considered is the true nature of the transaction and whether in fact it has resulted in profit or less to the assessee. 6.1 It is also seen that the Adjudicating Authority has recorded the following findings :- Though the assessee provides insurance cover, security arrangement and bears the electricity charges and rent in respect of the godowns, no amount is charged from the recipient of service. The expenditure on those accounts are borne by the assessee out of the profit margin earned on the sale of liquor. Since the value of taxable service shall be the gross amount charged by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Sun Export Corporation v. Board of Trustees, Bombay on 1997 (96) E.L.T. 3 (S.C.) AIR 1998 SC 92 has held in the context of goods remaining the warphase (sic) demurrage implies a chages (sic) which the port trust can levy at a particular rate if the goods remain on the dock beyond a (sic) 6.4 In view of the above decisions, the learned Advocate argued that the amount collected towards demurrage cannot be termed as storage charges for purposes of levy of the Service Tax. 6.5 On a very careful consideration of the entire issue, we find that the appellant-corporation has been established for the distribution of liquor within the state of Karnataka by purchase and sale of liquor from the various manufacturers and di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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