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2016 (4) TMI 892 - CESTAT MUMBAI

2016 (4) TMI 892 - CESTAT MUMBAI - 2016 (42) S.T.R. 337 (Tri. - Mumbai) - Liability of Service tax - 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 - Held that:- in the whole transaction, no service recipient is existing, therefore there is no question of providing any service to any person. Merely for the reason that Section 150 provides for distribution of the amount of procee .....

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me is sustainable. - Decided against the revenue - Appeal No. ST/101/12-MUM - Final Order No. A/3677/2015-WZB/STB - Dated:- 13-10-2015 - MR. P.S. PRUTHI, MEMBER (TECHNICAL) AND MR. RAMESH NAIR, MEMBER (JUDICIAL) For the Petitioner : Shri Sanjeev R. Nair, Examiner (A.R.) For the Respondent : Shri Keval Shah, C. A. ORDER PER : RAMESH NAIR This appeal of Revenue is directed against Order-in-Appeal No. US/467/RGD/2011 dtd. 28/11/2011 passed by the Commissioner of Central Excise (Appeals), Mumbai-II, .....

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50 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 proceed of the sale in auction and adjusted the same against storage and warehouse charges the same is liable to service tax as the amount is nothing but receipt towards services o .....

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refore the sale proceed of auction of abandoned goods is not proceed towards providing any service to any service recipient therefore the same is not chargeable to the service tax. He further submits that Ld. Commissioner (Appeals) has rightly dropped the demand relying on the Board Instruction F. No. D 11/1/2002-TRU dated 1/8/2002 wherein it was clarified that no cargo handling service said to have been rendered in case of abandoned cargo, therefore service tax is not leviable. 5. We have caref .....

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he 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. Commissioner (Appeals) is reproduced below: I have gone through the records of the case and the oral and written submissions made before us. The issue in the instant case is to decid .....

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t 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 storage and warehousing services provided by the appellants in respect of such imported goods. It is indeed a fact that auctioning of uncleared cargo is part of the busines .....

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vided 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 cleared, warehoused, or transshipped within 30 days after unloading. The said Section envisages sale of the goods by the person having the custody thereof. Similarly, as .....

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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, there must be a taxable service provided, a service provider, a service receiver and a consideration received for the provision of the taxable service. In this case, on c .....

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red 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 sale proceeds to the respective components as per the order of priority stipulated under Customs Act. Therefore, the surplus amount retained by the appellants, for statutory .....

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