Buffer stock maintenance by sugar mills not taxable under storage services. Subsidies exempt from service tax.

The Division Bench of the Appellate Tribunal CESTAT, New Delhi held that maintaining buffer stock by sugar mills does not constitute a taxable service under "storage and warehousing services." The subsidy received by the sugar mills for holding the buffer stock of sugar was not subject to service tax.

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The Appellate Tribunal CESTAT, New Delhi heard a case regarding the taxability of maintaining buffer stock by sugar mills as a taxable service under "storage and warehousing services." The issue involved whether sugar mills are liable to pay service tax on the subsidy received for holding the buffer stock of sugar. The case was referred to a Division Bench for decision as a Single Bench lacked jurisdiction to decide such appeals.

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