2012 (28) STR 264 (Tri.-Mumbai) Commissioner of Service Tax, Mumbai vs. P. N. Writer & Co. Ltd.

Facts:

The respondents were engaged in storage and retrieval of records of banks and corporate houses and the records consisted of discharged cheques, vouchers, agreements, books of accounts etc. not intended for sale, but to comply with a statutory requirement. The department contended that the services were classifiable under storage and warehousing and therefore, leviable to service tax. The respondents contested that storage and warehousing of goods were leviable to service tax. As per Finance Act, 1994, the definition of ‘goods’ is adopted from the Sale of Goods Act, 1930. In case of R. D. Saxena vs. Balram Prasad Sharma (AIR 2000 SC 912), the Hon’ble Supreme Court has held that to constitute goods, the same should be marketable. Since files, records etc. were not saleable, it could not be considered as goods. However, the adepartment pleaded that in view of express definition of “goods” under Sale of Goods Act, 1930, every movable property is considered to be goods. Since files, records etc. were movable property, the same should essentially be considered as ‘goods’ and condition of sale was not necessary for levy of service tax.

Held:

As per section 2(7) of the Sale of Goods Act, 1930, to constitute goods, saleability was an essential criteria. If the intention was not to consider the saleability, the service tax laws would not have referred to the definition of goods under the Sale of Goods Act, 1930. Further, the Hon’ble Supreme Court has passed numerous judgments holding that the goods are something which can come into the market for being bought and sold. Therefore, following the judgment delivered in case of R. D. Saxena vs. Balram Prasad Sharma (Supra), it was held that the files, records etc. cannot be considered as goods in the absence of its feature of saleability and therefore, the activity cannot be covered under the storage and warehousing services leviable to service tax.