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TMI Blog2014 (5) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... f oxygen. Thus, electricity is an input for the manufacture of oxygen. Oxygen, in turn, is used by the appellant's clients in the manufacture of iron and steel products. Electricity cannot be considered as an input for providing the services of operation of air separation plant, it cannot be considered as an additional consideration flowing to the appellant from their client for providing the service of operation of plant and cannot be considered as part of the gross amount charged for the service of operation of the plant - Decided in favour of assessee. - Appeal Nos.ST/324/09, 360/10, 649/11, 691/12-Mum - Final Order Nos. A/697-700/2014-WZB/C-I(CSTB) - Dated:- 29-4-2014 - S S Kang and P K Jain, JJ. For the Appellant : Shri L Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icity is supplied by their customer and no separate charges are payable by the appellant to their customer for the electricity so used. The service charges also vary if the electricity consumed is lower or more than the pre-determined units of electricity. The appellant is paying service tax on the actual amount received as service charges. 3. The Revenue wants to add the price of electricity for determining the taxable value for purpose of service tax. The dispute in this case is relating to this factor alone. IN all the appeals before us, this is the main issue. Since the issue is common and is also pertaining to the same appellant, all the appeals have been taken up together. In the impugned orders, the adjudicating authority has take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uing show cause notice regarding the correctness of the said service. A miscellaneous application was filed by the appellant to reclassify the service under the category of 'management, maintenance or repair service'. The said application was dismissed as that was not an issue before the adjudicating authority. 7. Be that as it may, we come for consideration whether the cost of electricity can be added for determining the value of taxable service. We find that the operation of a plant for manufacture of goods is an activity for the production of goods. It is doubtful that such an activity can be covered by the consulting engineer service as it is neither advice, consultancy or technical assistance. Even it is doubtful whether suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a service provider, for the service provided or to be provided is inclusive of service tax payable, the value of such taxable service shall be such amount as, with the addition of tax payable, is equal to the gross amount charged. (3) The gross amount charged for the taxable service shall include any amount received towards the taxable service before, during or after provision of such service. (4) Subject to the provisions of sub-sections (1), (2) and (3), the value shall be determined in such manner as may be prescribed. Explanation. -For the purposes of this section,- (a) consideration includes any amount that is payable for the taxable services provided or to be provided; (b) money includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s amount charged by the service provider for the service provided is as per the agreement. The price of electricity cannot be considered as an additional consideration received by the appellant form their customers. The appellant does not get benefitted by the free supply of the electricity in any way. Further, the electricity is consumed in the manufacture of oxygen. Thus, electricity is an input for the manufacture of oxygen. Oxygen, in turn, is used by the appellant's clients in the manufacture of iron and steel products. 11. In view of the above position, we are of the view that electricity cannot be considered as an input for providing the services of operation of air separation plant, it cannot be considered as an additional co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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