In Brief
Two state-owned chemical companies (GSFC and GACL) received hydrocyanic acid through a shared pipeline and shared incineration and handling facility costs equally. The tax authority treated the charges as 'Storage and Warehousing Services' subject to service tax. The Supreme Court allowed the appeal, holding that service tax applies only where one party provides a service to another for identifiable charges. Here, the arrangement was a joint venture with cost-sharing; both parties contributed to facilities and shared expenses. No service was rendered by one to the other. Accordingly, service tax did not apply and the demand was set aside.
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