M. Ajit Kumar ORDER
Sulekha Beevi, Member (J)
1. Brief facts are that the appellant is registered with the department for providing various taxable services. They are engaged in the manufacture of goods viz. Liquid Nitrogen, Liquid Oxygen and they supply these goods to various customers. The liquid gases are transported by trucks in special vehicle transport tanks and delivered to the customers as per the requirement. The appellant had entered into agreement with various customers for supply of goods (gases) as well as for providing fixed facilities in the nature of Vacuum Insulated Storage Tanks at the customer's site. On verification of agreements entered between the appellant and their customers, it was found that the appellant installed the said tanks at the customer's premises for continuous supply of nitrogen liquid. The customers are required to provide space for installing the said tanks and free access is given to the appellant for supply of liquid nitrogen gas. Appellant was receiving fixed facility charges (FFC) from their customers for providing such storage tanks. The ownership, control, maintenance and insurance are undertaken by the appellant and the customers are restricted to use the said tanks for storage of the products purchased from the appellant alone. It therefore appeared to the department that the appellant is providing services in the nature of 'supply of tangible goods'. Show cause notice was issued to the appellant demanding service tax along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand, interest and imposed penalty. On appeal, the Commissioner (Appeals) upheld the same. Hence this appeal.
2. Ld. Counsel Sri Joseph Prabakar appeared and argued for the appellant. It is submitted that the appellant has entered into various agreements with the customers for providing supply of liquid gases as well as providing storage tanks. The ownership of the tanks remains with the appellant and the possession and effective control is with the customer during full term of the agreement. Appellant raises a separate central excise invoice for collecting the amount for providing storage tanks as 'Fixed Facility Charges' (FFC). Appellant paid Excise Duty on the same. Moreover appellant has also paid VAT @ 4 % on the Fixed Facility Charges being the transfer of right to use/deemed sale, under the Puducherry Value Added Tax Act, 2007. The demand is now made alleging that the FFC collected by the appellant is a consideration for providing supply of tangible goods service. The appellant having discharged excise duty and paid VAT on the said FFC collected from the customers, the appellant cannot be further burdened with levy of service tax of the same amount. Ld. Counsel adverted to the Board Circular F. No. 6/03/2013-CX.1 dated 10.11.2014 to submit that Board has issued clarifications in relation to levy of Central Excise Duty on the Fixed Facility Charges (FFC) and Minimum-Take-Or-Pay (MTOP) collected by the appellant. The said clarification has been issued specifically in the case of the appellant namely M/s. Inox Air Products Ltd. It is clarified in the said circular that appellant has to discharge Central Excise duty on the FFC and MTOP charges collected.
3. The very same issue as to whether appellant is liable to pay service tax on the FFC collected by them was analyzed by the Tribunal in the case of Goyal MG Gases Private Ltd.-MANU/CK/0021/2022 : 2022-VIL-189-CESTAT-KOL-ST. The Tribunal in the said case followed the decision of the Hon'ble High Court of Madras in the appellant's own case in Inox Air Products Pvt. Ltd. Vs UOI-MANU/TN/4428/2020 : 2020 (38) GSTL 158 (Mad.). Ld. Counsel prayed that the appeal may be allowed.
4. Ld. A.R Sri M. Ambe supported the findings in the impugned order.
5. Heard both sides.
6. The period of dispute is from 16.05.2008 to March 2009. The demand of service tax has been r........