Public Sector Undertaking liable for service tax on storage, not GTA services. Consignees responsible for freight charges. Deposit required.

The Tribunal found the State Public Sector Undertaking liable for service tax on storage and warehousing services but not for GTA services. The consignees were deemed responsible for freight charges, absolving the applicant of liability. The Tribunal directed a deposit of Rs.30.00 lakhs within eight weeks, with the remaining dues waived and recovery stayed pending appeal, subject to compliance. Failure to deposit would result in appeal dismissal.

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Issues: Application for waiver of pre-deposit of service tax, penalty under Section 78, penalties under Finance Act, 1994.

Analysis:
1. The applicant, a State Public Sector Undertaking, sought waiver of pre-deposit of service tax, penalty, and penalties under the Finance Act, 1994 amounting to Rs.6.60 Crores.

2. The contention revolved around the applicant providing storage and warehousing services for food grains and whether they were liable to pay service tax for GTA services.

3. The applicant did not dispute the liability of service tax on storage and warehousing charges but vehemently argued against liability for GTA services. They argued that as per Rule 2(d)(v) of Service Tax Rules, 1994, the consignee was liable to pay freight charges and hence the service tax.

4. The Department contended that as consignors, the applicants were required to discharge service tax as they initially paid the freight charges and later collected them from customers.

5. The Tribunal found that the applicants provided storage and warehousing services for food grains, making them liable for service tax. However, based on the standard storage terms and conditions, the consignees (FCI, IFFCO) were ultimately responsible for freight charges, as per Para 3.3 and 3.6 of the terms.

6. The Tribunal interpreted Rule 2(d)(v) of Service Tax Rules, 1994, stating that the liability to pay service tax for GTA services rested on the person liable to pay freight charges, which in this case, was the consignee.

7. To ensure justice, the Tribunal directed the applicant to deposit Rs.30.00 lakhs within eight weeks, after which the remaining dues would be waived and recovery stayed during the appeal. Failure to comply would lead to dismissal of the appeal.

This detailed analysis of the judgment highlights the key arguments, interpretations of relevant rules, and the final decision of the Tribunal regarding the waiver of pre-deposit of service tax and penalties under the Finance Act, 1994.

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