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TMI Blog2017 (11) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... company is apportioned as towards operation of the power plant and the reminder 25% as towards consideration for repairs and maintenance of the power plant. Appellant further divided the entire work into following categories segregating repairs and maintenance work and the operation activity and paid service tax as follows : a) Operation Service No Service tax is paid. b) Maintenance Service Service Tax is paid on 100% of its value. c) Technical Service ST is paid on 100% of its value d) Plant Manager's Office ST is paid on 25% of its value. e) Safety Department ST is paid on 25% of its value. f) Annual Overhead allowance ST is paid on 25% of its value. g) Environmental Dept. ST is paid on 100% of its value. Proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ambit of 'manufacture' for the purpose of Management, Maintenance and Repair Services. 2.2 In respect of the service tax liability on value of consumables, Ld. Advocate submits that in the case of Shapoorji Pallonji Infrastructure Capital Company Ltd. cited supra, the decision relied upon by him, it had been held that cost of consumables and spares used in providing maintenance services are required to be included in the gross value. The appellant therein had availed cenvat credit in respect of the consumables so utilized and was therefore hit by the bar in that respect provided under Notification No.12/2003-CE. However in the present matter, appellants had not availed any such cenvat credit on the consumables utilized and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant has countered this allegation stating that the activity would not fall under management of immovable property. That it will get covered under the definition of Business Auxiliary Service; the dominant activity carried out in the power plant being generation of electricity and maintenance of the power plant being only an incidental one. That generation of electricity amounts to manufacture of goods within the meaning of section 2(f) of the Central Excise Act, 1944. That electricity is mentioned under Chapter Heading 27.16 of the First Schedule to the Central Excise Tariff Act, 1985, with effect from 1.3.2005 and electricity being an excisable product, though with nil rate of duty. We have to say that this argument of the appellant i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellants are operating the power plant to generate electricity on behalf of the owner for supplying the same to TNEB. 10.2 In arriving at this conclusion, we also draw sustenance from the decisions of this Tribunal as follows:- (a) CMS (I) Operations & Maintenance Co. P. Ltd. Vs. Commissioner of Central Excise, Pondicherry - 2007 (7) STR 369 (Tri. Chennai). Paragraphs 30 and 31 are reproduced as follows:- "30. In the impugned order the Commissioner had rendered a finding that the facility was run by entering into contracts with different organizations such as CMS who had contracted to undertake the operation and maintenance of the facility. He found that though CMS was operating the facility for generating electricity, the enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and considered the submissions made by both sides. The issue raised is the true meaning and scope of operation and maintenance agreement dated 14-3-95. The appellant had taken over the plant and was operating & maintaining it in terms of the agreement. A perusal of the agreement makes it clear that it is a contract between owner and an operator. The terms of the contract vest complete freedom and responsibility on the appellant, without any interference by the owner. The owner's right is restricted to entry and access, to be satisfied that the operation is carried out according to standards. He also receives reports about the relevant aspects of operation, status and output. The payment for operation and maintenance are determined under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant portion is extracted below:- "In the present case, admittedly, there are two agreements into existence, one is clearly for operation of power plant and second is for maintenance on which appellant discharged the service tax. The agreement of operation of plant is neither involved any management of either plant or maintenance or repair. Entire plant was taken over by the appellant for operation. Therefore, the same does not fall under Management, Maintenance or Repair Service. As per our above discussion as well as settled legal position on the identical issue as per the above judgments, we are of the view that the impugned order is not sustainable, therefore, the same is set aside." Following the same ratio, we hold that the conside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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