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TMI Blog2019 (6) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... se of fuel oil, lube oil, spares parts, etc beyond the norms set; in terms of the above agreements, the Appellants charge "operation fee" and "maintenance fee" separately from the customers for operating and maintaining their power plants; appellants started paying service tax on the "maintenance fees" collected by them for maintenance of the power plant, with effect from 1.7.2003, although they opined that they were not liable to pay service tax on "maintenance fees". This fact is not in dispute. Revenue contended that power plant is an immovable property & the operation thereof would amount to "management" of an immovable property taxable under the category 'maintenance and repair' service; appellants started paying service tax on "operation fee" w.e.f. 1.5.2006, claiming that as the customer was entitled to credit of the same and the Appellants did not want to litigate as it was revenue neutral situation. Revenue issued a Show Cause Notice, dated 28.8.2007, to the appellants, demanding service tax of Rs. 2,31,60,447/- under the head 'Management, Maintenance or Repair Services', for the period 16.6.2005 to 30.4.2006. The demand was confirmed by the Commissioner, vide OIO dated 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants submit that, by no stretch of imagination, the activity undertaken by the Appellants would be covered under "management" of immovable property. The phrase 'Management of Immovable Property' would only cover looking after immovable property for e.g. caretaker, supervising, upkeeping, etc. i.e., a passive role. Managing the property means supervising and administering a place for another person. In the present case, the Appellants are themselves actually and physically operating the plant for generating the electricity. In other words, the Appellants are using the plant themselves. The Appellants are not managing the property for any other client/person. Therefore, the aforesaid activity cannot be treated as management of immovable property. The plant is being operated by the Appellants for generation of electricity. The other activities such as maintenance etc. are incidental to the main activity of generation of electricity. The said activities are undertaken for smooth functioning and operation of the plant. The said activities are in nature of self service. In view of the above, no service tax can be demanded from the Appellants & the impugned Order is liable to be set as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curred by the appellants on this account." The dispute in the present case is squarely covered by aforementioned decisions and thus, the impugned order is liable to be set aside. 2.4. The Learned counsel for the appellants also submits that maintenance of immovable property became taxable with effect from 16.6.2005. Hence, service tax paid on maintenance of power plant for the period prior to 16.6.2005 should be adjusted against the present demand. Assuming while denying that the Appellants are liable to pay service tax on "operation fees" for the period from 16.6.2005 to 31.4.2006, the aforesaid amount paid as service tax on maintenance of power plant for the period prior to 16.6.2005 should be adjusted against the demand of service tax on management of power plant for the period from 16.6.2005. Accordingly, no demand of service tax will survive. 2.5. The Learned counsel for the appellants further submits Demand beyond normal period is barred by limitation since there is no suppression of facts much less with intention to evade tax; the Appellants were under bona fide belief that they are not liable to pay service tax on the said transaction; even prior to 16.6.2005, facts wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustry; by virtue of contracts entered there-into. The appellants charged "operation fee" and "maintenance fee" separately from the customers. They have been discharging Service Tax on "maintenance fee" collected by them from 01.07.2003. Revenue issued a SCN holding that power plant is an immovable property and the operations thereof would amount to management of immovable property taxable under the category "Maintenance & Repair Service "for the period 16.06.2005 to 30.04.2006. 4.1. The definition of "Maintenance or Repair Service" for the period 16.06.2005 to 01.05.2006 is as follows: (64) "maintenance or repair" means any service provided by- (i) any person under a contract or an agreement, or (ii) a manufacturer or any person authorised by him, In relation to - (a) Maintenance or repair including reconditioning or restoration, or servicing of any goods or equipment, excluding motor vehicle; or (b) Maintenance or management of immovable property. Analyzing the activity undertaken by the appellants vis-à-vis the above definition, we find that the appellants are basically operating the power plants on behalf of their customers. As submitted by the appellants, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal 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 01.03.2005 and electricity being an excisable product, though with nil rate of duty. We have to say that this argument of the appellant is not without substance. The major activity in the power plant is production of electricity which is an excisable product. Further, activity of production of electricity cannot be equated with management of immovable property. In a situation where the property to raise profits whereas in the present case, it is for generation of electricity. The contention of the department may be applicable to a situation where the management is handed over to a management company for the sole purpose of management of the immovable property. In the present case, the sole purpose of management of the immovable property. In the present case, the sole purpose is not management of immovable property. Further, the management, if any, of the power plant is done by the appellants and is only inci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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