2009 (5) TMI 46 - AT - Service Tax

Business Auxiliary Service procurement of inputs - appellants have a heating machine to heat Hydraulic Oil which is used for heating the hydraulic press used for pressing the design mould at their factory premises. In addition to their own use of the heated hydraulic oil, they also supplied heated fluid to adjacent two companies through pipelines for which they received heating charges on hourly basis which is in no way can be treated as service rendered as it is only a supply of excess heated oil to other units - no third party involved activities not liable to service tax.

Summary

The Appellate Tribunal CESTAT, Chennai ruled in favor of the appellants, setting aside the service tax demand of Rs.1,49,002/- for supplying heated thermic fluid. The tribunal concluded that the activity of supplying excess heated oil to adjacent units did not constitute 'Business Auxiliary Service' subject to service tax as it was not a procurement of goods or service for the client.