Case Law Details
M/s. Hindustan Petrochemical Corporation Ltd. Vs Commissioner of Central Excise (Appeals) (CESTAT Bangalore)
From the records made available and argument proposed, it comes out that the appellant M/s. Hindustan Petrochemical Corporation Ltd. (HPCL) though are performing certain activities in relation to the maintenance and safety of the tank trucks and are issuing a certificate to the effect that the tanks are purged/degased, the same cannot be considered to be a service within the scope of “Technical Inspection and Certification Service”. It is to be understood that the appellants are not basically an agency involved with the testing and certification. In fact, it is abundantly clear that they are performing certain activities which make the truck tanks fit to be filled with LPG for further transportation. This is to be construed only as an activity related to the safety and maintenance of the tank truck. We are inclined to come to a conclusion that M/s. HPCL have not fulfilled the conditions so as to impart the activity of purging and degassing tank trucks as “Technical Inspection and Certification Service”.
FULL TEXT OF THE CESTAT JUDGMENT
The appellants, M/s. Hindustan Petroleum Corporation Limited, are Government of India undertaking engaged in the business of refining of crude and marketing of various petroleum products. The appellants have facility to store imported as well as indigenous LPG at Mangalore. From these facilities, LPG is sent through tank trucks to various LPG bottling plants of oil distribution companies. Whenever LPG tank trucks require any repair or mandatory testing of safety valves, the tanks are cleaned and completely degassed. During this activity, water is filled in tank mounted on the truck and discharged. Water is displaced by LPG vapors. For this activity, the appellant collects cost of water, LPG and the labour charges from the truck owners. The department contended that the activity undertaken by the appellants fairly falls under the heading “Technical Inspection and Certification Service”. A show-cause notice dated 28.6.2006 was issued and confirmed by Order-in-Original No.34/2006 dated 4.12.2006 holding that any repair to truck tankers had to be conducted with the advance approval in writing and the repair work should be conducted as per the code IS 2825 / BS 5500; the contractors are allowed to purge and degas the trucks; therefore, competent party duly approved by CCOE or the appellants themselves provide such service; from the certificates issued by the appellants, it is apparent that they have certified that the truck tankers are purged as required under petroleum law. The Commissioner (A) vide Order-in-Appeal No.112/2008 dated 21.8.2008 upheld the entire demand of service tax with interest and penalty. Hence, this appeal.
2. The appellant submitted that for an activity to be classifiable under the category of “Technical Inspection and Certification Service”, the ingredients provided under Section 65(108)(109) of the Finance Act, 1994 read with Section 65(105)(zzi) of the Finance Act, 1994 which reads as follows needs to be satisfied.
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