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TMI Blog2018 (8) TMI 954X X X X Extracts X X X X X X X X Extracts X X X X ..... viding required storage services to the users/importers of the respondent and are paying service tax on such provision of service. 2. The Department issued a show-cause notice dated 11.05.2005 to the respondents demanding a service tax of Rs. 32,11,458/- (Rupees Thirty Two Lakhs Eleven Thousand Four Hundred and Fifty Eight only) and educational cess of Rs. 11,709/- (Rupees Eleven Thousand Seven Hundred and Nine only) under the category of 'Storage and Warehousing Service' for the period 16.08.2002 to November 2004 while seeking to levy interest and penalties. The Additional Commissioner, Mangalore vide Order-in-Original No. 32/2006 dated 30.10.2006 has confirmed the demand along with interest and penalty. The learned Commissioner (Appeals) on an appeal filed by the respondents has set aside the entire demand. On this the Department has filed the present appeal on the following grounds: (a) M/s. Adept Agencies Pvt. Ltd. were not dealing with the users of storage and warehousing infrastructure of the respondents directly. There is an agreement between M/s. Adept Agencies and the respondents. (b) M/s. Adept Agencies were paying a sum of Rs. 1,00,000/- (Rupees One Lakh only) to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that they are providing taxable services on their own account. Even if there exist contractual liability for providing services or responsibilities as custodian on the appellants for providing these services, this is not enough to attract liability unless it is established that the appellants are actually providing the services and receiving remuneration for the same. This is not established. The case record on the contrary show that the appellants are raising bills for storage only charging on the basis of tank capacity occupies for number of days. No charges are attributable to any service provided." .... 3.1. The respondents further submitted that the other Agency is providing storage and warehousing services on their own account and paying service tax on remuneration received; the Department's case therefore cannot be sustained unless receipts of M/s. Adept Agency Pvt. Ltd. are clubbed with that of the appellants for treating the clubbed amount as receipt for services of storage and warehousing; no service charges have been collected by the appellants and consequently they are not liable to pay any service tax on their rent receipts; Ownership of storage and warehousi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Lakh) per month from M/s. Adept Agency for not allowing others to provide services like loading, unloading, clearing, delivery of cargo etc; therefore, the users of tank have no choice but to utilize such services from M/s. Adept Agencies only. Therefore, the agreement between the respondents and M/s. Adept Agencies is only a veil to evade tax under the service of "storage and warehousing" by showing renting of tanks and others services are not provided by the respondents; when the agreements are read together the veil disappears and clarification given by the Board would not come to the aid of the noticee. The learned DR has concluded by showing that the relationship between the respondents and M/s. Adept Agencies Pvt. Ltd. is one of a principal and agent and therefore the respondents are liable to pay service tax as rightly demanded and confirmed by the Order-in-Original. 4.1. At this juncture, the learned counsel for the respondents has pointed out that the respondents have their operations all over the country and in no other places other than Mangalore the Department has raised the demands against the respondents on the same issue. A perusal of the agreement clearly brings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome for evading tax. Going by the facts of the case, it appears that M/s. Adept Agency is an independent and unrelated organization dealing with respondents and users on a principal to principal basis. A analogy can be drawn at this juncture of a mandap keeper who provides space for conducting marriages, functions, parties etc; should clients require any catering services for such ceremony there is normally a designated colour for the mandap and the client can avail his services. 5.1. In common parlance for this purpose the mandap keeper is not referred to or understood to be providing a catering service. In the instant case also the respondents are owners of storage tanks and rent out the same to different importers. It may be a fact that as custodian of tanks there might be obligation under Customs law for safety, security, duty liability etc. But for the services which are performed and which can be categorized under the heading of „Storage and Warehousing services‟ they have an agreement with M/s. Adept Agencies to perform such functions in relation to the tanks owned by them to their prospective customers. We find that the clarification given by the CBEC vide ci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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