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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 ..... nce 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 01.03.2005 and electricity being an excisable product, though with nil rate of duty. 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 incidental to the activity of generation of electricity. The activity carried out in the power plant is not solely management of power plant, but operation of the same. The word operation is not used in the definition of Maintenance and Repair services which is relied by department as amended with effect from 16.06.2005. The said word in seen used in the definition of Business Support Services ( Operational assistance ). Thus, it is very much clear that management of immovable property does not include operation activities. In addition, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epair Services', for the period 16.6.2005 to 30.4.2006. The demand was confirmed by the Commissioner, vide OIO dated 20.1.2010, while levying penalty of ₹ 3.50 Cr under Section 78 of the Finance Act, 1994, Penalty, @2% of the service tax due per month subject to maximum of the duty, under Section 76 of the Finance Act, 1994 and a Penalty of ₹ 1000/- under Section 77 of the Finance Act, 1994. Hence, this appeal. 2. The Learned counsel for the appellants submits that the word "management" would take colour from "maintenance" and "repair"; therefore, "management" would not include operation within its scope. Taking though legislative history of the definition of "maintenance or repair" from 14.5.2003 to 1.5.2006, the counsel submits that the Rule of construction 'Noscitur A Sociis' would apply to construe the term "management" appearing in the definition of 'maintenance or repair' service. This Rule of construction was applied by Apex Court in following cases: a) Rohit Pulp and Paper Mills Vs CCE - 1990 (47) ELT 491 (SC) b) Rainbow Steels Vs. CST - 1981 (2) SCC 141. He submits that by applying the principle of Noscitur A Sociis, the term 'management' would take colou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f service. In view of the above, no service tax can be demanded from the Appellants & the impugned Order is liable to be set aside. 2.2. The Learned counsel for the appellants also submits that the dispute is no longer res integra. Settled in favour of Appellants by judgement in CLP Power India Vs CST 2016-TIOL-3125-CESTAT-MUM wherein the Tribunal considered the entry 'Management, Maintenance or Repair' services in the context of operation of power plants & held as under: "From the above judgments, it can be seen that activity of operation of plant does not fall under category of taxable service in the head of management, maintenance and repair service. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under bona fide belief that they are not liable to pay service tax on the said transaction; even prior to 16.6.2005, facts were known to both the parties. Firstly, the department has already issued a Show cause notice F. No. V /STC /Wartsila/ 29/03/Bel dated 16.9.2003 wherein the department sought to demand service tax under the category of "Consulting Engineer" on operation and maintenance fees received by the Appellants during the period 1999 to 2002. Statement of the employee of the Appellants relied upon in the current show cause notice is dated 7.6.2005 given by Mr. A.S. Desai, Power Plant Manager; the demand raised in the present show cause notice is for the period from 16.6.2005 onwards. Thus, the department was aware of the fact from the first day of the period for which the demand is raised, that the appellants have not been paying service tax on the "operation fee" under 'maintenance or repair' service or any other category of taxable service existing as on 16.6.2005. So there is absolutely no suppression during the period under consideration; there are several judicial decisions in favour of the Appellants. Hence, the bona fide belief of the Appellants is justifiable; t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we find that the appellants are basically operating the power plants on behalf of their customers. As submitted by the appellants, management would pre-suppose activities like regulating, supervision, direction and control of the activities of the others functionaries in the organization. But in this case, we find that there is no such activity undertaken by the appellants. They are only operating the power plants. It appears that the appellants are not managing the plant for others, in fact, they are themselves operating the plants. In other words, the appellants are using the plants themselves. 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. In effect, the maintenance part of it, the activities are in the nature of self service to the appellants themselves. However, the appellants are discharging Service Tax on the amounts received as maintenance fee. Therefore, we find that the service rendered by them would not fall under the category of "maintenance or management of immovable property". 4.2. We further find that the issue is no lo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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