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TMI Blog2013 (10) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... utilization of Fly ash as mentioned in Draft Notification dated 6.11.2008 issued by the Central Government, wherein the Thermal Power Stations are permitted to sell Fly ash. There is no mention in the contract between the appellant and cement and asbestos sheet companies that the appellant is providing any service to them. Activity of collection and removal of Fly ash as per rate of the order of Government of Tamil Nadu would not constitute ‘infrastructural support service’ under the definition of ‘Support Service of Business or Commerce’. We have noticed that Government of India, Ministry of Environment and Forests issued Notification dated 14.9.1999 to the effect that Fly ash should be supplied free of cost. Subsequently, by notification dated 6.11.2008, issued by Ministry of Environment and Forest, Thermal Power Stations are permitted to sell Fly ash to the user agencies. It makes it clear that the consideration received by the appellant from the cement and asbestos sheet companies for supply of Fly ash seems to be for sale of fly ash. In our opinion, it is not for any service provided to the persons taking delivery of Fly ash, notwithstanding the name under which, it is col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anybody. In other words, they are disposing of Fly ash as per Government order and therefore there is no question of levy of service tax. He further submits that the Commissioner erroneously observed that it is an infrastructural support service to the cement companies. He further submits that the entire dispute is raised on the basis of a communication dated 29.3.2007 issued by the Deputy Commissioner of Central Excise, Anaimedu, Salem, showing these activities as service charges collected for fly ash removal. It is submitted that on the basis of that letter and the subsequent correspondences by the officers of the applicant mentioned these collections as service charges for disposal of Fly Ash. He also drew attention to the Bench page no. 46 of the compilation and submits that the amount so collected is revenue to the Tamil Nadu Electricity Board. He also drew the attention of the Bench that the cement companies and asbestos companies are paying procurement tax on fly ash procured as revealed from the GO (MS). The learned senior counsel placed a copy of the show-cause notice dated 17.4.2012 issued to the sister unit at Tuticorin proposing demand of Central Excise duty on such Fly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fly ash in building materials in order to avoid disposal of Fly ash in open areas which would affect the environment. 4.1 Ministry of Environment Forest, Government of India issued a draft Notification No. 453 (E) dated 22.5.1998 under Rule 5(3) of the Environment (Protection) Act, 1986 inviting objections and suggestions from all persons likely to be affected and thereby to protect the environment, conserve top soil and prevent dumping and disposal of Flyash, discharged from coal or lignite based thermal power plant. 4.2 The Government of Tamil Nadu, issued Policy decision vide Order G.O. No. 248 dated 22.9.1997 for utilization of Fly ash in Tamil Nadu. For the purpose of proper appreciation, the relevant portion of the G.O. No. 248 dated 22.9.1997 is reproduced below:- 4. Considering the adverse impact of Fly ash on the environment if released and dumped in pits and other related problem like huge requirement of land for ash ponds etc. and taking into account the various representations received and after examining carefully all aspects, the Government announces the following policy / guidelines to help promote fly ash to brick/building materials and other products manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r:- Every coal or lignite based thermal power plant shall make available ash, for at least ten years from the date of publication of this notification, without any payment or any other consideration, for the purpose of manufacturing ash-based products such as cement, concrete blocks, bricks, panels or any other material or for construction of roads, embankments, dams, dykes or for any other construction activity (Emphasis by us) 4.5 Ministry of Environment and Forest, Government of India, issued a draft Notification S.O. 2623 (E) dated 6.11.2008 under Section 3 and 5 of the Environment (Protection) Act, 1986 proposing to make further amendment of earlier Notification S.O. 763 (E) dated 14.9.1999. In the said draft notification, all coal or lignite based thermal power station would be free to sell Fly ash to the user agencies subject to the condition as specified therein. It is also notified in the draft notification that the amount from sale of Fly ash would be made in the following manner:- The amount collected from sale of fly ash and fly ash based products by coal and/or lignite based thermal power stations or their subsidiary or sister concern unit, as ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfillment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operational assistance for marketing, formulation of customer service and pricing policies, infrastructural support services and other transaction processing. Explanation -For the purposes of this clause, the expression infrastructural support services includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security. Section 65(105) (zzzq), Taxable Service means any service provided or to be provided to any person, by any other person, in relation to support services of business or commerce, in any manner. 7. The object of levy of Business Support Service as stated by the Joint Secretary (TRU) vide letter dated 28.2.2006 is as under:- Business Support Services : Business entities outsourcing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned at this stage is that the learned senior counsel at the time of hearing before the Tribunal placed a copy of Show Cause Notice dated 17.4.2012 to show that there is a doubt in the mind of the authority, either the Service Tax or Central Excise duty would be levied on clearances of Fly ash. The said Show Cause Notice was issued by the Joint Commissioner of Central Excise, Tirunelveli to their sister unit M/s. Tuticorin Thermal Power Station, Tuticorin proposing demand of Central Excise duty along with interest and penalty on clearance of Flyash during the period 1.3.2011 to 31.8.2011. It appears from the said Show Cause Notice that Fly ash attracts Tariff rate of 10% of excise duty. Central Excise Duty Exemption on Fly Ash under Notification No. 76/86-CE dated 10.2.1986 has been withdrawn vide Notification No.17/2011-CE dated 1.3.2011. With effect from 1.3.2011, as per Notification No.1/2011-CE dated 1.3.2011 (Sl. No. 27), Fly Ash attracts 1% duty without CENVAT credit facility. A general effective rate of 5% is also prescribed without any condition vide Notification No.2/2011-CE dated 1.3.2011 (Sl. No. 14). However, in the present case, we are concerned with levy of serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d manufacturing company. 14. We have already discussed above that the Tamil Nadu Electricity Board issued order dated 11.12.2003 for collection of the rates as service charges in view of the Notification issued by the Central Government directing not to receive any payment or any consideration for fly ash and the order issued by State of Tamil Nadu is to charge rates . Subsequently, the appellant also issued orders and mentioned the rates as service charge. After introduction of levy of service tax on Business Support Service as on 1.5.2006, the Deputy Commissioner of Central Excise, by letter dated 29.3.2007 requested the appellant to furnish details of service charges collected for Fly ash removal for the last five years from 2002-03. So the submission of the learned Senior Advocate that the dispute was raised on the basis of letter dated 29.3.2007 of the Deputy Commissioner of Central Excise showing the activities as service charges, is factually incorrect. The appellant in the statement of Fly ash Generation / Utilisation and Disposal for the Period April 2005 to march 2006 mentioned the total amount as Revenue to Board . But, the Chief Engineer of Mettur Thermal Powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned in Draft Notification dated 6.11.2008 issued by the Central Government, wherein the Thermal Power Stations are permitted to sell Fly ash. There is no mention in the contract between the appellant and cement and asbestos sheet companies that the appellant is providing any service to them. 16. In our considered view, the activity of collection and removal of Fly ash as per rate of the order of Government of Tamil Nadu would not constitute infrastructural support service under the definition of Support Service of Business or Commerce . We have noticed that Government of India, Ministry of Environment and Forests issued Notification dated 14.9.1999 to the effect that Fly ash should be supplied free of cost. Subsequently, by notification dated 6.11.2008, issued by Ministry of Environment and Forest, Thermal Power Stations are permitted to sell Fly ash to the user agencies. It makes it clear that the consideration received by the appellant from the cement and asbestos sheet companies for supply of Fly ash seems to be for sale of fly ash. In our opinion, it is not for any service provided to the persons taking delivery of Fly ash, notwithstanding the name under which, it is col ..... X X X X Extracts X X X X X X X X Extracts X X X X
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