2012 (12) TMI 38 - AT - Service Tax

Tribunal remands case for reevaluation without pre-deposit; rental charges for storage tanks exempt from service tax.

The Tribunal remanded the case back to the Commissioner (Appeals) for a decision on merits without requiring the appellant to pre-deposit 50% of the ... Storage and Warehousing Services - reverse charge mechanism - pre-deposit requirement under stay order - remand for fresh adjudication - prima facie viewStorage and Warehousing Services - reverse charge mechanism - prima facie view - Storage charges paid for imported cryogenic tanks used to carry liquid helium are not covered by 'Storage and Warehousing Services' for the purpose of levy under the reverse charge mechanism (prima facie). - HELD THAT: - The Tribunal took the view that the rental charges were paid in respect of tanks in which the imported helium itself was carried and which were necessary for importation; consequently such charges do not fall within the category of Storage and Warehousing Services. This conclusion was expressed as a prima facie view after hearing the parties and by treating the tanks as integral to carriage and import of the goods, thereby excluding the impugned rental from the service-tax category alleged by Revenue. [Paras 4, 6]Prima facie held in favour of the appellant that the storage charges are not taxable as Storage and Warehousing Services under the reverse charge mechanism.Pre-deposit requirement under stay order - remand for fresh adjudication - Whether the appeal should proceed and the question of pre-deposit be waived pending fresh adjudication by the Commissioner (Appeals). - HELD THAT: - The Tribunal waived the statutory pre-deposit requirement and took up the appeal for disposal. Noting that the impugned order before the Tribunal had not considered the merits, the matter was remanded to the Commissioner (Appeals) for a decision on merits. The Tribunal directed that no pre-deposit be insisted upon by the Commissioner (Appeals) while considering the matter, but clarified that the Tribunal's prima facie view is not binding on the Commissioner (Appeals). [Paras 3, 5, 6]Pre-deposit waived; matter remanded to Commissioner (Appeals) to decide on merits without insisting on any pre-deposit, tribunal's view being only prima facie.Final Conclusion: The Tribunal, after waiving pre-deposit, gave a prima facie view that the rental/storage charges for the cryogenic tanks used to import liquid helium are not taxable as Storage and Warehousing Services, and remitted the matter to the Commissioner (Appeals) for fresh adjudication on merits without requiring any pre-deposit; the Tribunal's view is not binding on the Commissioner (Appeals). Issues:Appeal against impugned order for non-compliance with Section 35F of Central Excise Act, 1944 and Section 83 of Finance Act, 1994. Dispute over liability to pay service tax on rental charges for storage tanks used to import and export liquid helium gases.Analysis:The appellant, a manufacturer of liquid gases, imported liquid helium in special tanks for storage at minus (-) 269 0 C. The tanks were required to be exported within six months from importation. The Revenue contended that the appellant should pay service tax on the rent of these storage tanks under 'Storage and Warehousing Services' category. The Commissioner (Appeals) directed the appellant to pay 50% of the service tax, which they failed to pre-deposit, leading to dismissal of their appeal for non-compliance with the stay order.The Tribunal, after hearing both sides, waived the pre-deposit requirement and proceeded with the appeal. It was observed that the rental charges were paid by the appellant on the exported goods, and the storage tanks were essential for importing the helium gases. Consequently, the storage charges were not considered to fall under 'Storage and Warehousing Services' category, warranting no pre-deposit at that stage.Since the impugned order did not consider the case's merits, the matter was remanded back to the Commissioner (Appeals) for a decision on merits without the need for pre-deposit. The Tribunal clarified that its view was preliminary and not binding on the Commissioner (Appeals) during the case's further consideration. The appeal and stay application were disposed of accordingly.