2018 (6) TMI 662 - AT - Service Tax

Tribunal rules in favor of FPU on taxability of offshore crude oil storage services

The Tribunal ruled in favor of the appellant, a Floating Production Unit (FPU), in a case concerning the taxability of storage and warehousing services ... Storage and warehousing Services - temporary storage of processed crude and offloading of the same was provided by Prosafe Production Services - Reverse charge - Held that:- The appellant is not liable to pay service tax as the recipient of service of the nature not falling within the purview of section 65(105)(zza) of the Finance Act, 1994 r/w section 65 (102) of the said Act - Though the department's appeal has been admitted by the Hon'ble Supreme Court, no stay has been granted by the said Court - appeal allowed - decided in favor of appellant. Issues Involved:1. Taxability of storage and warehousing services provided by a foreign company to an appellant engaged in offshore crude oil production.Analysis:The case involved the appellant, a Floating Production Unit (FPU), engaged in offshore crude oil production. The appellant paid a foreign company for services related to the operation of a Floating Store and Offloading Unit (FSO), which involved the temporary storage and offloading of processed crude oil. The Revenue considered these services as taxable storage and warehousing services and raised a demand based on this premise.The appellant argued that a previous decision by the Tribunal in their own case had already settled the issue, stating that the appellant was not liable to pay service tax as the services received did not fall within the purview of the relevant sections of the Finance Act, 1994. The appellant requested that the impugned order be set aside and the appeals be allowed.On the other hand, the Revenue pointed out that the Tribunal's previous final order had been appealed before the Supreme Court, and the Supreme Court had admitted the department's appeal. However, no stay had been granted by the Supreme Court in this matter.After hearing both sides, the Tribunal found that the appellant was not liable to pay service tax based on the previous decision in the appellant's own case. Despite the appeal to the Supreme Court, since no stay had been granted, the Tribunal set aside the impugned order and allowed the appeals with any consequential relief.In conclusion, the Tribunal ruled in favor of the appellant, holding that the services provided by the foreign company for storage and warehousing were not taxable under the relevant provisions of the Finance Act, 1994. The decision was based on the Tribunal's previous ruling in the appellant's own case, and the absence of a stay from the Supreme Court allowed the Tribunal to set aside the Revenue's demand and provide relief to the appellant.