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TMI Blog2024 (8) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... owards consideration received by the appellant without establishing as to how the said security deposit is includible in the amount of consideration charged for the taxable value. Since it is a returnable deposit with no nexus to the nature of service provided, there is no justification in levying Service Tax on the said deposit amounts. In support of the proposition that a security deposit obtained by the person for purpose of keeping business viability during the period of service in question, without any nexus between deposit and the consideration cannot be constituted as a part of the taxable service. Any interest therefore earned thereon shall not be includible in the gross taxable value for purpose of assessment. The department has woefully failed to establish any nexus with the security deposit to the discharge of the taxable service per se nor has it been borne out of record that such deposit in any way influences the value of the service rendered. It thus cannot form part of the taxable service and demand on this account for the aforesaid amount of Rs.40,77,945/- is required to be set aside. Fuel Surcharge - HELD THAT:- The amount has not been contested and was paid correc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges account for provision of service whether by way of initial connection or re-connection or any other name assigned. The appellant is liable to pay Service Tax of Rs.18,491/- thereon and the same is confirmed. Amount of Cenvat Credit taken on Capital Goods utilized against Output Services - HELD THAT:- The appellant submits that they have taken the said credit of erection, commissioning and installation service, as an input service, but have erroneously indicated the same as input and capital goods. Since such mistake is a curable defect, the said amount is otherwise eligible for availment of Cenvat credit and therefore allowed. Time Limitation - HELD THAT:- The matter did not call for invocation of extended period at all. It is on record that the DGCEI authorities had sourced all information and records from the appellant way back in 2004 under summons seeking from them their written profile and disclosing the nature of business activities carried out along with the requisite records of the case. Hence the confirmed demand for the extended period is time barred. The amount of demands paid, under various heads stated herein - paid/not contested and/or appropriated by the lowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Advance Received against Transmission Charges from Tea Estate and other consumers. 2. Service Tax amount of Rs. 40,77,945/- is proposed for recovery against the said amount. This amount is part of the amount confirmed by the adjudicating authority. The appellant submits that in fact the said amount of Service Tax has been levied on advances received against transmission charges sourced from the tea estates and other consumers. They state that this advance is nothing, but a three months security deposit to secure payment and is taken in terms of Clause 12.3 of the contract entered into with their customers. For ready reference the said clause is extracted hereunder:- 12.3 The CONSUMER shall have to deposit an amount of Rs.6,65,000.00 (Rupees Six Lakh Sixty five thousand only) which is approximately equivalent to Gas T.C. Bills of those 3(three) months for which maximum quantity of gas is booked, as an advance with the COMPANY and this will be retained by the COMPANY till the date of expiry of the Agreement. The above amount is calculated as per the gas price T.C. shown in clause 11.00, 11.02 11.03. The above deposit will have to be paid in the form of Bank Draft drawn in favour of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance in this regard on the law as settled by the Tribunal s decision in the case of Abhishek Alcobe Pvt.Ltd. vs. CCE, Noida [2022 (62) GSTL 178 (Tri.All.)] and that of Sameer Rajender Sah vs. CCE, Kolapur [2015 (37) S.T.R. 154 (Tri.- Mumbai)]. In support of the proposition that a security deposit obtained by the person for purpose of keeping business viability during the period of service in question, without any nexus between deposit and the consideration cannot be constituted as a part of the taxable service. Any interest therefore earned thereon shall not be includible in the gross taxable value for purpose of assessment. The department has woefully failed to establish any nexus with the security deposit to the discharge of the taxable service per se nor has it been borne out of record that such deposit in any way influences the value of the service rendered. It thus cannot form part of the taxable service and demand on this account for the aforesaid amount of Rs.40,77,945/- is required to be set aside. We do so. (b) Fuel Surcharge. 4. The amount has not been contested and was paid correctly by the appellant and therefore the subject needs no further elaboration. (c) Minimum D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Charges received from Domestic Consumers. 8. An amount of Rs.22,63,502/- has been made out and confirmed by the adjudicating authority. However, we note that the said amount is required to be collected by way of a security deposit in terms of section 14 of the Petroleum and Natural Gas Regulatory Board Act, 2006 (PNGRB Act). Since this amount is required to be collected in terms of a statutory provision and is refundable at the time of surrender of the connection, this amount cannot form part of the taxable value for consideration for provisioning of taxable service and therefore not liable to Service Tax. Service Tax confirmed thereto by the lower authority is set aside. (g) Reconnection Charges Collection against Re-installation. 9. This amount is stated to accrue to the appellant, for failure of the customers in default of payment of Bills in time and subsequently dis-connection/re-connection of the said facility. The said amount has accrued on account of dis-connection charges/resumption of supply. We do not find any merit in the plea of the appellant in stating the same as penal in nature and not a provision of service. Therefore we are of the view that such charges accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed amt. Taxable Value Service Tax Including Ed. Cess S HE Cess A Advance Received against Transmission Charges from Tea Estate and other consumers 7520400 7520400 929521 B Minimum Demand Charge (MDC) 49222776 49222776 6083935 C Amt. Received against cost of Gas Meter and Installation Charges 5429900 2171960 268448 D Amt. against cost of Gas Meter and Installation Charges received from Domestic Consumers 20819016 8327606 1029292 E Reconnection Charges Collection against Re-installation 90000 36000 4449 TOTAL 8315645 H Amount of Cenvat Credit taken on Capital Goods utilized against Output Services 129280 As evident from the table aforesaid, the said show cause notice relates to : (i) Advances received against transmission charges from tea estates and other consumers as have been deliberated by us in paras 2 3 above. Our findings setting aside the said demand are replicated for the instant show cause notice. (ii) Minimum demand charge as deliberated in para 5 above, holding non-leviability of service tax on this count, apply squarely herein. (iii) Amount received against the cost of gas meter and installation charges that have not been contested and were appropriated by the adjudicati ..... 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