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TMI Blog2019 (3) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... obtaining in the Electricity Act, 2003, therefore, the petitioner cannot be said to be distributing or selling or trading in electricity when, it is receiving high-tension supply from Indian Power Corporation Ltd. and providing low-tension electricity to the occupants of the commercial complex. Sale, trading and distribution being taken out of the contention, the only other thing that remains to describe the activity undertaken by the petitioner, is service. The activity of the petitioner sought to be made exigible to tax does not come within exclusions contained in Section 65B(44). The Finance Act, 1994 provides a negative list of services in Section 66D. If, an activity which does not come within the negative list of services as defined in Section 66D of the Finance Act, 1994, such an activity is to be termed as a service exigible to tax under the Finance Act, 1994. It is the contention of the petitioner that, the activity of the petitioner comes within the negative list of services defined in Section 66D particularly in view of Section 66D(e) and (k). As noted above, the petitioner cannot be said to be indulging in trading of goods or in transmission or distribution of elect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intendent of Service Tax. Thereafter, the petitioner by its letter dated January 30, 2015 intimated the respondent no. 3 that, it was not liable to pay Service Tax. The Assistant Commissioner of Service Tax, by a letter dated March 27, 2015, held the view that, the redistribution of electricity by the petitioner was eligible to Service Tax. Learned Advocate for the petitioner has submitted that, the action of redistribution of electricity is a sale/trading activity. It cannot be termed as a service. Absence of any licence under the Electricity Act, 2003 does not mean that, the petitioner is not selling or trading in electric supply. According to him, electricity is a goods . He has referred to Chapter 27 of the Central Excise Tariff Act, 1985 and submitted that, it incorporates electrical energy under the heading 271160000 thereof as a good . The West Bengal Value Added Tax Act, 2003 includes electrical agency as a good capable of being bought and sold and exempt the same from any levy thereunder. He has referred to Section 21 of the West Bengal Value Added Tax Act, 2003. He has also relied upon the definition of electricity under the Electricity Act, 2003, particularly Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Sanchar Nigam Ltd. v. Union of India) and submitted that, applying such test, since, the transaction is eminently one of sale and the sale and the so-called service being indivisible, then, the transaction is to be treated as a sale. Therefore Service Tax is not leviable. Without prejudice to his previous contentions, learned Advocate for the petitioner has submitted that, in view of Section 66D(e) of the Finance Act, 1994 read with Section 66B thereof, trading of goods is excluded from the scope of taxability under the Act of 1994. Even if the petitioner does not qualify as an electricity consumption or distribution utility within the meaning of Section 65(B) of the Act of 1994, the same is not relevant as, the petitioner is not claiming any benefit under Section 66D(k) of the Act of 1994. In such circumstances, he has submitted that, it should declared that, the nature of transactions by the petitioner with its occupiers with regard electricity, should be held to be sale rather than a service. Learned Advocate appearing for the respondents has submitted that, the petitioner is essentially providing service to the occupiers and is therefore, is exigible to Service Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that, the petitioner is a consumer. Therefore, the petitioner cannot claim itself to be a trader. The petitioner has no approval from any of the State or the Central Authorities, to trade in electricity. The bills raised by the petitioner are as a consumer. The licensee has raised bills on the petitioner treating the petitioner as a consumer. The transaction in question, does not fall within the negative list and therefore, the transaction is exigible to Service Tax. Learned Advocate appearing for the respondents has referred to Sections 2(70) and (74) of the Electricity Act, 2003 and submitted that, the nature of transactions between the petitioner and the ultimate consumers, cannot be treated as a sale of electricity by the petitioner to such consumers. Therefore, according to him, the transaction being exigible to Service Tax, the petitioner is liable to pay the same. The petitioner operates a commercial complex under the name and style of Galaxy Mall at Asansol. The commercial complex has various occupants. The petitioner obtains electric supply from India Power Corporation Ltd. formally known as DPSC Ltd. through a high-tension supply. The petitioner steps down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consumer; ( 71) trading means purchase of electricity for resale thereof and the expression trade shall be construed accordingly; ( 72) transmission lines means all high pressure cables and overhead lines (not being an essential part of the distribution system of a licensee) transmitting electricity from a generating station to another generating station or a sub-station, together with any step-up and step-down transformers, switch-gear and other works necessary to and used for the control of such cables or overhead lines, and such buildings or part thereof as may be required to accommodate such transformers, switchgear and other works; ( 73) transmission licensee means a licensee authorised to establish or operate transmission lines; ( 74) transmit means conveyance of electricity by means of transmission lines and the expression transmission shall be construed accordingly; SECTION 12. ( Authorised persons to transmit, supply, etc., electricity): No person shall (a) transmit electricity; or (b) distribute electricity; or (c) undertake trading in electricity, unless he is authorised to do so by a licence issued under section 14, or i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Central Government or State Governments or local authority and who is not deemed as an employee before the commencement of this section. .. ( 50) tax means service tax leviable under the provisions of this Chapter; ( 51) taxable service means any service on which service tax is leviable under section 66B; Charge of service tax on and after Finance Act, 2012. SECTION 66B. There shall be levied a tax (hereinafter referred to as the service tax) at the rate of [fourteen] per cent on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed. Negative list of services SECTION 66D. The negative list shall comprise of the following services, namely;- ( e). Trading of goods. .. ( k). transmission or distribution of electricity by an electricity transmission or distribution utility; Under the definitions as obtaining in the Electricity Act, 2003, the petitioner cannot be said to be a generating company. It has not claimed itself t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eaning of the Electricity Act, 2003. Although electricity is a goods as held in National Thermal Power Corpn. Ltd. (supra) and is capable of being traded, the petitioner does not have the requisite licence to trade in electricity. The activity of the petitioner, therefore, cannot be treated as a trade as it would violate the provisions of the Electricity Act, 2003. Therefore, it cannot be said that, the petitioner is trading in electricity. Aluminium Co. (supra) has held that, the entire transaction of supplying electricity from the point of his generation to the point of his consumption is to be treated as being part of the sale of goods. Aluminium Co. (supra) was rendered before the Electricity Act, 2003 came into effect. Even then, subsequent to the Electricity Act, 2003 coming into effect, the petitioner cannot claim to be selling electricity as a goods as, the petitioner is not licensed under the Electricity Act, 2003, to sell electricity. The dominant purpose test as laid down in Bharat Sanchar Nigam Ltd. (supra) if at all applied would be against the petitioner, in the facts of the present case. The activity of the petitioner cannot be said to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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