2016 (4) TMI 892

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....r (Appeals) has set aside the Order-in-Original and allowed the appeal of respondent. 2. The issue involved in the present case is that whether proceed of auction of warehoused imported goods, in case of importer abandoned the goods, shall be considered as service charges towards storage or warehouse and is liable for service tax. 3. Shri Sanjeev R. Nair, Examiner (A.R.) appearing on behalf of the Revenue reiterating the grounds of appeal submits that as per Section 150 of the Customs Act, 1962, when the goods is sold by public auction, proceed of any such sale among other payment, charges in respect of goods sold due to the person having custody of the goods, the said proceed is also paid towards storage and warehouse charges. Since,....

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....uestion of providing any service to any person. Merely for the reason that Section 150 provides for distribution of the amount of proceed of auction that will not empowered the department to recover service tax on the auction proceeds. The Ld. Commissioner with proper application of mind given detailed finding not only on the facts but also on the law point of Section 48, 150 of Customs Act, 1962 and also discussed in detail the service tax provision and referred Master Circular dated 23/8/2007 and Board Circular dated 1/8/2002. Findings of the Ld. Commissioner (Appeals) is reproduced below: "I have gone through the records of the case and the oral and written submissions made before us. The issue in the instant case is to decide t....

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....ed by CFS. In such a situation there are two transactions taking place concurrently i.e. (i) the warehousing of the goods of the depositor (importer) in the CFS and (ii) sale of uncleared goods to the (new) buyer by way of auction by the CFS. Section 48 of the Customs Act, 1962 prescribe the procedure in the case of goods not cleared, warehoused, or transshipped within 30 days after unloading. The said Section envisages sale of the goods by the person having the custody thereof. Similarly, as per Section 150 of the Customs Act, 1962, the proceeds from the auction sales should first go to (i) expenses for sale (2) payment of freight and other charges to the carrier (3) payment of duty (4) payment of the charges in respect o....

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....omes subject to Sales Tax. It is for the appellants (custodian of the goods) to apportion the sale proceeds to the respective components as per the order of priority stipulated under Customs Act. Therefore, the surplus amount retained by the appellants, for statutory disbursement to the owner of the goods is not in the nature of "storage and warehousing service" and as mentioned earlier, it is leftover of the sale proceeds and as per Section 150 of the Customs Act, required to be given to he owner of the goods. Notification No. 12/2003-ST dated 20.06.03 exempts so much of the value of goods and materials sold by the service provider to the recipient of service, from the Service Tax leviable thereon under Section (6) of the Act, sub....