Bihar State Warehousing Corporation Vs Commissioner of Central Excise & Service Tax (CESTAT Kolkata)
The CESTAT Kolkata considered whether service tax demands under the categories of “storage and warehousing service” and “Goods Transport Agency (GTA) service” were sustainable against the appellant for the period April 2003 to March 2008. A Show Cause Notice dated 17.03.2009, along with a corrigendum dated 22.07.2009, demanded service tax of ₹6,60,85,211/-. The adjudicating authority confirmed the demand with interest of ₹2,06,712/- and imposed penalties under Sections 77 and 78 of the Finance Act, 1994. The appellant contended that the storage services related to food grains, which are agricultural produce and specifically excluded from the definition of “storage and warehousing service” under Section 65(102) of the Finance Act, 1994. The Tribunal accepted this contention and held that the demand of ₹1,33,96,302/- under the category of storage and warehousing service was unsustainable. Regarding GTA service, the Tribunal noted that under Rule 2(1)(d)(v) of the Service Tax Rules, 1994, the liability to pay service tax rests on the consignor or consignee who pays the freight if they fall within the specified categories. As FCI, IFFCO and other depositors were the consignors or consignees liable to pay freight under the storage agreement, the appellant was not liable to pay service tax on GTA services. Accordingly, the Tribunal set aside the demand of ₹5,26,88,909/- under GTA service. Since the appellant did not contest the interest demand of ₹2,06,712/-, the Tribunal upheld it. The appeal was disposed of by setting aside both service tax demands while sustaining the interest component.
