Sale of abandoned cargo, whether it was liable for service tax under the category of “Cargo Handling Service” and “Storage Warehousing Service”.

The Appellant was selling abandoned cargo and paying VAT thereon. Commissioner demanded service tax on sale of such abandoned cargo after meeting various expenses incurred under the category of “Cargo Handling Service” and “Storage Warehousing Service”. The Appellant relied on the Circular no.11/1/2002-TRU, dated 1st August 2002 and on cases of Mysore Sales International Ltd. vs. Assistant Commissioner 2011 (22) STR 30 (Tribunal) and India Gateway Terminal Pvt. Ltd. vs. Commissioner 2010 (20) STR 338 (Tribunal).

Held

It was held that sale of abandoned cargo is not exigible to service tax as the circular mentioned above clearly states that no service tax was to be levied on the activities of the custodian where he auctions abandoned cargo and VAT is paid in respect of sales. Placing reliance on Mysore Sales International Ltd. (supra) and India Gateway Terminal Pvt. Ltd (supra), the impugned order was set aside.