Appellant not liable for Service tax due to lack of wilful suppression & absence of service provider-receiver relationship

The judgment concluded that the extended period for demanding Service tax could not be invoked as there was no wilful suppression of facts by the appellant. The liability of the appellant to pay Service tax under 'storage and warehousing service' was also dismissed as there was no clear service provider-service receiver relationship, and the auction income was considered a sale, not a service. As a result, the appellant was not liable to pay Service tax, and the impugned order was set aside, allowing the appeal.

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Issues:
1. Invocation of extended period for demand of Service tax.
2. Liability of the appellant to pay Service tax under 'storage and warehousing service'.

Extended period for demand of Service tax:
The judgment addressed the issue of invoking the extended period of limitation for demanding Service tax. It was noted that the extended period was invoked because the "auction income" was not reflected in the relevant ST-3 returns. However, the absence of wilful suppression of facts to evade tax payment was highlighted. The appellant had fully disclosed the "auction income" in their books of accounts, which were public documents. The judgment cited the case of CCE v. H.M.M. Ltd. to support the argument that the extended period cannot be invoked based on these grounds. It was concluded that the extended period of limitation could not be applied in this case, limiting the demand to one year from the relevant date.

Liability to pay Service tax under 'storage and warehousing service':
Regarding the liability of the appellant to pay Service tax under 'storage and warehousing service', the judgment analyzed the arguments presented. The appellant contended that no Service tax was payable as there was no clear service provider-service receiver relationship. The judgment agreed with this argument, emphasizing that without a service receiver, the question of Service tax payment does not arise. The appellant also relied on a Board Circular stating that Service tax is not leviable on auctioned goods where no service is rendered. The judgment inferred that this clarification on 'cargo handling service' applied to 'storage and warehousing service' as well. It was further highlighted that the transaction during the auction was considered a sale, not a service, as evidenced by the payment of sales tax by the successful bidder. The judgment concluded that the auction income did not represent storage and warehousing charges, and hence, the appellant was not liable to pay Service tax on it. Consequently, the impugned order was set aside, and the appeal was allowed.

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