2014 (12) TMI 594 - AT - Service Tax

Business Support services - generation and distribution of electricity by using coal - Collection of the charges for disposal of the fly ash from the Cement manufacturers and Brick manufacturers - Held that - Tribunal had already set aside the demand of tax in the applicant s own case 2013 (10) TMI 436 - CESTAT CHENNAI for earlier period. Hence, there is no reason to remand this case to the Commissioner (Appeals). Accordingly, we set aside the impugned orders - Decided in favour of assessee.

Summary

Issues Involved:
Tax demand on charges collected for disposal of Fly ash under the category 'Support Services of Business'.

Analysis:

Issue 1: Tax Demand on Charges for Fly ash Disposal
The appellants were engaged in generating and distributing electricity using coal, resulting in the production of Fly ash. They collected charges for the disposal of Fly ash from Cement and Brick manufacturers as per government notifications. The tax demand on these charges under the category of 'Support Services of Business' was confirmed by the adjudicating authority, leading to interest and penalty imposition.

Issue 2: Previous Tribunal Decision
The Ld AR for the Revenue argued that the appeal was dismissed due to non-compliance with a stay order. However, the Tribunal noted that a similar issue had been resolved in the appellant's favor in a previous case. The Tribunal analyzed the notifications issued by the Central and State Governments regarding Fly ash disposal and concluded that the charges collected did not constitute infrastructural support services under the definition of Support Service of Business or Commerce.

Issue 3: Legal Interpretation and Conclusion
The Tribunal emphasized that the consideration received for Fly ash disposal appeared to be for the sale of Fly ash rather than for any service provided. Referring to government notifications allowing the sale of Fly ash, the Tribunal held that the demand for service tax was not sustainable. Additionally, the Tribunal agreed with the limitation argument raised by the Senior Advocate, leading to relief from penalty under relevant sections of the Finance Act, 1994.

Final Decision
Considering the previous Tribunal decision in the appellant's favor and the lack of merit in the tax demand for Fly ash disposal charges, the Tribunal set aside the impugned orders. The appeal was allowed with consequential relief, and the stay petition was disposed of. The Tribunal also dismissed a miscellaneous application related to linking the present appeal with a previous one that had already been decided.