TMI Blog2018 (8) TMI 954X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 - the respondents cannot be asked to pay service tax under the category of "Storage and Warehousing Service". Time Limitation - Held that:- A show-cause notice has been issued on 11.05.2005 clearly beyond the normal period - As the Department was having knowledge of the agreement between respondents and the Adept Agencies Pvt. Ltd as early as 21.11.2002, issuance of show-cause notice for extended period that too solely based upon the agreement between the respondents and M/s. Adept Agencies is not acceptable - issue is barred by limitation. Appeal dismissed - decided against Revenue. - ST/304/2007-DB - Final Order No. 20973/2018 - Dated:- 16-7-2018 - SHRI S.S GARG, JUDICIAL MEMBER And SHRI P. ANJANI KUMAR, TECHNICAL MEMBER Smt Kavita Poduwal, Superintendent (AR) For the Appellant Shri G. Shivadass, Advocate For the Respondent ORDER Per: P. ANJANI KUMAR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of service element by giving exclusive rights to another party and are receiving monetary consideration. (e) Though Adept Agencies receive the amount and receive the service charges from the users, the respondents have also made a profit in this margin. (f) The agreement between Adept Agencies and the respondents are in the nature of principal and the agent. (g) As per the authorization license issued to the respondent, the respondents are to be held strictly responsible for safe custody of bonded goods and are responsible for the safe custody of the goods as well as for legal implication. (h) In terms of Board s Circular B/11/01/2002 TRU dated 01.08.2002, the respondents had made arrangement for loading, stacking, unloading etc. through M/s. Adept Agencies are required to pay service tax. (i) Though M/s. Adapt Agencies have taken a separate registration, the services provided by the respondents is not mere renting but it is storage and warehousing services. 3. The counsel for the respondents submitted that they are engaged in constructing storage tanks for liquid cargo for use by importers for storage of oil; they have in turn entered into an agreement with M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t only and another service provider provides services and receives taxable remuneration; Rental income accruing to owner cannot be taxed unless it is proved that service provider is acting as an agent of the owner; findings recorded at Para 61 of the O-I-O are therefore, entirely without a legal basis. 3.2. The counsel further submitted that they have rental contracts separately with the importers and they have nothing to do with the storage handling, loading unloading etc i.e. operations provided by M/s. Adept Agency Pvt. Ltd; therefore, no service tax is payable by them; as alleged by the Department, M/s. Adept Agency Pvt. Ltd., as far as providing of taxable services is concerned, are not the agents of the respondents. 4. The learned DR has submitted that the respondents are performing the functions of warehouse and storage of liquid cargo in tanks even though they are in the business of renting of storage tanks; as per the agreements, the obligation of the respondents is not pure renting; all activities which are in the nature of warehousing, except insurance, are being performed by the respondents; the obligations of the respondents in terms of the agreement entered into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iv. Loading the cargo in tankers/railway rakes. v. Weighment of the cargo. vi. Keeping records of the cargo, deliveries etc. vii. Coordinating with the surveyor. viii. Cleaning of the tankers, pipeline and pigging operations. And at para 8 it is categorically mentioned that the respondents will collect only rental charges from the importers/users of other storage tanks and charges for the above services shall be billed and cleared by the second party from the importers/users, therefore the Department s contentions are incorrect and the order of the learned Commissioner (Appeals) is legal and proper. 5. Heard both sides and perused the records of the case. The brief issue to be decided in this case is as to whether the amounts received by the respondents from M/s. Adept agencies Pvt. Ltd. should suffer service tax and as to whether the respondents are performing any such storage and warehousing services to the customers through M/s. Adept Agencies on a principal to agent basis. On going through the agreement between the respondents and the M/s. Adept Agencies Pvt. Ltd., it is seen that M/s. Adept Agencies are required to provide various services as enumerated i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions, storage godown and tankers operated by private individuals etc. The storage and warehousing service provider normally make arrangement for space to keep the goods, loading, unloading and stacking of goods in the storage area, keeps inventory of goods, makes security arrangements and provide insurance cover etc. Service provided in ports has already been covered under the category of port service. 4 . 5. It has been stated that in some case a storage owner only rents the storage premises. He does not provide any service such as loading/unloading, stacking, security etc. A point has been raised as to whether service tax would be leviable in such cases. It is clarified that mere renting of space cannot be said to be in the nature of service provided for storage or warehousing of goods. Essential test is whether the storage keeper provides for security of goods, stacking, loading/unloading of goods in the storage area. 5.2. We find that the respondents have rightly relied upon the ratio of the judgment in the following cases: a. Finolex Industries Ltd. Vs. CCE, Pune reported in 2007 (7) STR 408 (Tri.-Mumbai) b. M/s. Inox Air Products Limited Vs. C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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