COMMISSIONER OF SERVICE TAX, SERVICE TAX COMMISSIONERATE, BANGALORE Vs. KARNATAKA STATE WAREHOUSING CORPORATION

JUDGEMENT

(1.) This is an appeal by the Revenue challenging the order passed by the Tribunal which held that the demand of service tax made prior to the issue of show-cause notice is beyond the period of one year and is clearly barred by time.

(2.) The assessee, M/s. Karnataka State Warehousing Corporation, is a State Government undertaking. They were found to have rendered taxable services under the category of "storage and warehousing services" and "cargo handling services" during the period August 16, 2002 to March 31, 2005, without following the statutory formalities including payment of service tax due. On the omissions being pointed out to them, the assessee got registered as providers of storage and warehousing services in the year 2004. Thereafter, they accepted the liability and paid Rs. 2,51,806 as service tax under the category "cargo handling services". The assessee opposed the attempt to penalize them on the ground that they have failed to pay service tax. The assessing authority confirmed the demand of Rs. 53,79,256 under storage and warehousing services and Rs. 25,17,466 under the cargo handling services Rs. 39,03,044 and Rs. 5,00,000 already paid by the assessee towards their liability were appropriated. Thereafter, the assessing authority directed the assessee to pay interest as well as penalty.

(3.) Aggrieved by the same, the assessee preferred an appeal. After hearing the parties, the appellate authority held that the assessee was engaged in storage and warehousing facility for a consideration and that they raised commercial invoices for the services rendered and this showed that they were not levying any fee as statutorily prescribed and came to the conclusion that the services rendered by the assessee is of service which falls under the Act and, therefore, they are liable to pay service tax. It is on the question of limitation that it found that the show-cause notice issued on March 21, 2006 demanding service tax for the period August 16, 2002 to March 31, 2005 it is clearly barred by time. Therefore, the same was set aside. As the assessee had claimed that they had availed of input service and paid service tax qualified as Cenvat credit, the Tribunal wanted the assessing officer to assess the said claim. Therefore, the matter was remitted to the adjudicating authority for that purpose.