ORDER
S.L. Peeran, Member (J)
1. The appellant is required to pre-deposit Service tax amount of Rs. 65,47,829/- and penalty of Rs. 1,00,000/- and further penalty of Rs. 1000/- under Section 77 of the Act and penalty at the rate of Rs. 200/~ for every day. The assessee has been considered to be coming within the category of “Storage and Warehousing Service” as defined under Section 65(102) of the Finance Act, 1994. They have not got themselves registered and failed to pay the Service tax. Their activity in terms of the show cause notice was storing of goods i.e., liquor for the consideration received and hence the demands were raised for the period from July 2003 to March 2005 by invoking larger period. The Commissioner has considered all the submissions that they were not carrying on the storage and warehousing service and they were not received Service tax from their clients. They contended that they were only charging demurrage in terms of the agreement. However, the goods were insured and certain consideration was received, but the nature of consideration has been said to be demurrage. This plea of the appellant has been rejected by the Commissioner including the plea of time bar. The learned Counsel vehemently argued that matter and contended that in terms of the agreement whatever the charges they have collected is only demurrage charges and not storage charges. However, the Commissioner has relied on the Board’s Circular No. 80/1/2005-S.T., dated 10-8-2005. The learned Counsel submits that even in terms of the Board’s Circular what they have collected is only demurrage charges which is not coming within the category of storage and warehousing service. Therefore the Board’s Circular is also distinguishable. The learned Counsel submits that they were not charging any storage charges and they were not under a bona fide belief that they were not taxable and hence the question of alleging mala fides does not arise for invocation of the larger period.
2. The learned JDR referred to the findings of the Commissioner and contended that what has been collected by the assessee is storage charges only and not demurrage charges as contended by them. He points out the findings where the Commissioner has clearly recorded that the assessee has not produced any evidence to the effect that they received payment/charged any amount on account of security services, electricity charges, insurance, rent or salaries/wages from the service recipients. Therefore, in terms of the impugned order, what has been collected by them was only storage charges which is liable for Service tax.
3. On a careful consideration of the submissions made by both the sides, we notice that the appellant is not pleading financial hardship. Commissioner has considered all the aspects of the matter and has come to the conclusion that what has been collected is not demurrage charges but only storage charges.
Thus the appellants are trying to contest the findings of the Commissioner on both the grounds i.e. on merits and time bar. At this prima facie stage, it is not possible to say that what has been collected by the appellants is demurrage charges which is not taxable in the matter. However, taking into consideration of the overall all facts and circumstances of the case, the appellant is directed to pre-deposit an amount of Rs. 25,00,000/- (Rupees Twenty five lakhs only) within a period of three months from today and on such deposit, the pre-deposit of balance amount of Service tax and penalties stands waived and recovery stayed till the disposal of the appeal. The failure to comply with the terms of this order will entail dismissal of the appeal. Call on to report compliance on 11th December 2006.
(Pronounced and dictated in the open court)