2023 (10) TMI 56 - AT - Service Tax

Classification of services - business support service or not - supply of fly ash to cement companies - period from May, 2006 to September, 2010 - HELD THAT - A more or less identical issue has been considered in M/S. METTUR THERMAL POWER STATION VERSUS CCE, SALEM 2014 (12) TMI 594 - CESTAT CHENNAI wherein this Bench has followed its earlier order in METTUR THERMAL POWER STATION VERSUS CCE (ST) , SALEM 2013 (10) TMI 436 - CESTAT CHENNAI where the demand was set aside. The issue on hand is no more res integra in view of the fact that the same has already been decided by this very Bench in the cases of M/s. Mettur Thermal Power Station and hence, following the ratio laid down therein, the disputed activities of the appellant cannot be treated as business support service and the consequent demand would not therefore survive. Appeal allowed.

Summary

Issues involved:
The issue involves determining whether the appellant, a Government of Tamil Nadu undertaking engaged in electricity generation, is liable to pay Service Tax for supplying fly ash to cement manufacturers under the category of business support service as alleged by the Revenue.

Summary of the Judgment:

Issue 1: Alleged demand of Service Tax for supplying fly ash as business support service
The Revenue issued Show Cause Notices proposing to demand Service Tax for the period from May, 2006 to September, 2010 for supplying fly ash to cement companies under the category of business support service. The Adjudicating Authority confirmed the demands in Orders-in-Original. The appellant challenged these demands before the CESTAT Chennai.

Issue 2: Interpretation of the term "business support service"
The main issue for consideration was whether the appellant's activities of supplying fly ash to cement manufacturers constitute business support service under Section 65(104c) of the Finance Act, 1994. The appellant argued that the issue had already been settled in the cases of its sister concern by the Chennai Bench of the CESTAT.

Court's Decision:
After considering the arguments and previous decisions, the CESTAT Chennai held that the disputed activities of the appellant cannot be treated as business support service. The Tribunal had already set aside similar demands in the appellant's sister concern's case. Therefore, the impugned orders demanding Service Tax were set aside, and the appeals were allowed with consequential benefits, if any, as per law.

Conclusion:
The CESTAT Chennai ruled in favor of the appellant, holding that the supply of fly ash to cement manufacturers did not constitute business support service, based on previous decisions and the interpretation of relevant legal provisions.