TMI Blog2017 (6) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... their premises? Held that: - the storage facility are closely linked with sale of gas by the appellant. In other words, the creation and maintenance of such facility in the client’s premises is in furtherance of facilitating such sale of gas, by the appellant and purchase of same for industrial use by the client. It is a beneficial arrangement for both. In such situation it will not 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration termed facilities service charges / rental charges / facility fees . The 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. 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, 77, and 78 of Finance Act, 1994. On appeal, vide the impugned orders, the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 logistics and other transactional processing. These are basically in the nature of outsourced services. Further, the explanation in the tax entry clearly stipulates that the expression infrastructural support service includes, providing office along with office utilities, lounge, reception with competent per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 connected accessory in their premises. The consideration received in terms of agreements are variously termed as facility service charges / rental charges / facility fees . Revenue contends that the appellants are providing infrastructural support to their clients. The appellants contest the said claim, stating that they have supplied tangible goods and were discharging VAT considering the transaction as sale. Further, they have also contested the applicability of tax entry under Section 65(105zzzq) of the Finance Act, 1994. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to tax all such outsourced services. 8. In the present case, the admitted facts are that the appellants are engaged in the manufacture and sale of various types of industrial gases. They have entered into agreement with various clients for sale of such industrial gases. In respect of some of the clients they have also entered into separate agreements to provide certain plant and machinery or mostly, gas storage facilities along with necessary accessories. We have perused some of these agreements. 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax entry business support service will not cover the present case. Reliance was placed on the explanation to state that the nature of activities which are to be generally considered as infrastructural support service can be ascertained from such inclusive definition. These 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, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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