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M/s. Air Liquide North India Pvt. Ltd. Versus C.C.E. Jaipur

2017 (6) TMI 476 - CESTAT NEW DELHI

Business support service - providing of storage tanks and other accessories - receipt of ‘facilities service charges’/ ‘rental charges’/ ‘facility fees’ as consideration - Revenue entertained a view that such charges collected by the appellant shall be liable to service tax, considering the said activity as providing infrastructural support covered under tax entry ‘business support service’ w.e.f. 01.05.2006 - whether or not the appellants are liable to service tax in respect of the consideratio .....

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be correct to consider the amount received towards lease rent/ facility fee etc. as consideration for providing business support to the client. - Though the activities of the appellant, can be brought under very generic understanding of infrastructure support, when examined with statutory scope as per explanation indicating nature of services which are to be brought under tax net than it would appear that the present activity will not get covered under the said tax entry. - The renting .....

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mber (Judicial) And Mr. B. Ravichandran, Member (Technical) Mr. Manish Gaur (Advocate) for the Appellant Mr. Amresh Jain, DR for the Respondent ORDER Per: B. Ravichadran These four appeals are against two impugned orders dated 27.10.2010 and 26.11.2015 of Commissioner (Appeals) Jaipur-I. The issue involved is common. The appellants are engaged in the manufacture of excisable goods like oxygen, nitrogen, carbon dioxide and other gases liable to central excise duty. They are registered with the De .....

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l be liable to service tax, considering the said activity as providing infrastructural support covered under tax entry business support service w.e.f. 01.05.2006. Accordingly, proceedings were initiated against the appellant to demand and recover service tax for the period 01.05.2006 to 31.03.2011. The original authority confirmed service tax liability of ₹ 53,43,877/-, ₹ 18,52,690 and ₹ 15,06,288/- covered by the four demand notices. He also imposed penalties under Section 76, .....

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r facility charges or facility fee , cannot be taxed under business support service. The appellants have retained the title over the tangible goods supplied by them and had transferred the right of possession and effective control of such goods to the buyers. The terms of agreement clearly will prove that the service in the present case is supply of tangible goods service . (b) The main activity of the appellant is manufacture and supply of gas and in furtherance of that, they have provided thes .....

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r Section 65(104c) of the Finance Act, 1994, with reference to support services of business or commerce has to be understood in line with explanation appended to the said entry. The expression infrastructural support service should be considered for its meaning by applying the principal of Nocitur a Sociis. Infrastructural support service is used along with various other type of activities like telemarketing, processing of purchase orders, customer relationship, managing distribution and logisti .....

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ature of work carried out by the appellant, namely, the supply and installation of machinery, storage facility along with accessories in the buyers premises cannot fall under the various / categories of services either mentioned in the main definition of BSS or as indicated in the inclusive definition of infrastructural support services given in the explanation. Reliance was placed on various case laws, in support of this legal preposition. (e) The demand was also contested on limitation. As the .....

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tioned in the tax entry is only illustrative and does not restrict the scope of the term infrastructural support service . Accordingly, he submitted that the appellants are liable to service tax as confirmed by the lower authorities. 4. We have heard both the sides and perused the appeal records. 5. The point for resolution is whether or not the appellants are liable to service tax in respect of the consideration received from the clients for putting up machinery/ storage facilities for gas and .....

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zzq) of the Finance Act, 1994. 6. The statutory definition of Business Support Service is as below: Support Services of Business or Commerce means services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfillment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operati .....

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f the above said tax entry. It is clarified as under:- Business entities outsource a number of services for use in business or commerce. These services include transaction processing routine administration processing, routine administration or accountancy, customer relationship management and tele-marketing. There are also business entities which provide infrastructural support such as providing instant offices along with secretarial assistance known as Business Centre Services . It is proposed .....

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. In case of supply of equipments, plant and machinery, the appellants are entering into of lease agreement and the consideration is termed as lease rental charges . In most of the cases, the appellants are engaged in providing gas storage facility along with connected accessories. The agreements entered into for putting up these facilities at the client s premises are co-terminus with sale and purchase agreement for supply of gas. This makes it clear that the storage facility are closely linked .....

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2015 (38) STR 811 (Tri. Mum), the Tribunal held that providing place within the premises of the turf club by way of stall or canteen for consideration, is nothing but hiring or leasing of immovable property and cannot be considered as business support service. 9. In Mundra Port & Special Economic Zone Ltd. 2012 (27) STR 171 (Tri. Amd), the Tribunal held providing railway lines inside the port area for the railways to move the wagons cannot be considered as providing infrastructural facilitie .....

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hese are mainly administrative and office related support. The type of activities like putting up and managing gas storage facility in industrial unit are not fitting into overall scope of the infrastructural support service as contemplated by the inclusive definition given in the explanation. We note that though the activities of the appellant, can be brought under very generic understanding of infrastructure support, when examined with statutory scope as per explanation, indicating nature of s .....

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