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TMI Blog2025 (4) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... L under Section 66E(e) of the Finance Act, 1994 ("Act"), the same alleged as being an act of agreeing to obligation to tolerate the situation of delayed payment. 4. Heard the both sides and perused the appeal records. 5. We find that the issue involved in the present appeal is no longer res-integra and is settled by various decision of this Tribunal as under : - (i) Accounts officer, Madhya Pradesh Kshetra Vidyut Vitran Company Ltd. Versus Commr. of CGST, Cus. & C. Ex., Bhopal reported in 2019 (29) G.S.T.L. 734 (Tri. - Del.) (ii) K.N. Food Industries Private Limited. Versus Commissioner of CGST 86 C. Ex., Kanpur 2020 (38) G. S.T.L. 60 (Tri.All.) (iii) Neyveli Lignite Corporation Ltd. vs Commr. Of Cus., C. Ex. 86 S.T., Chennai, 2021 (53) G.S.T.L. 401 (Tri. - Chennai) (iv) Paradip Port Trust us Commissioner of CGST 86 Excise, Bhubaneswar, 2022 (62) G. S.T.L. 186 (Tri. - Kolkata). (v) Madhya Pradesh Poorva Kshetra Vidyut Vitran Co. Ltd. Vs Commissioner of CGST & Central Excise, Jabalpur., 2022 (67) G.S.T.L. 86 (Tri. Del). (vi) Madhya Pradesh Poorva Kshetra Vidyut Vitran Co. Ltd. Versus Principal Commissioner CGST and Central Excise Bhopal., 2021 (2) TMI 155- CESTAT New D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stribution utility". The issue involved in this appeal is not regarding the amount collected by the appellant for supply of electricity; the dispute is regarding the amount collected towards late payment surcharge, meter rent and supervision charges. 22. These three charges have been collected by the appellant in terms of the 2009 Regulations. The Principal Commissioner has confirmed the demand of service tax on "late payment surcharge‟ under section 66E(e) of the Finance Act by holding that the same is a consideration received by the appellant "for tolerating an act of electricity consumers by receiving the payments after the prescribed due date for payment of electricity bills. The Principal Commissioner has confirmed the demand of service tax on meter rent as a declared service under section 66E(f) of the Finance Act by holding that the same is the consideration received by the appellant for transfer of goods by way of hiring. The Principal Commissioner has also confirmed the demand of service tax on supervision charges collected from electricity consumers by holding that the same is taxable as it is not covered under any exemption. 23. According to the appellant the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The service would, therefore, be exempted from payment of service tax. The relevant portion of the order is reproduced below : "20. The facts of this case are required to be examined in the light of the above statutory provisions. In this case, we are concerned with transmission and distribution of electricity being the main services and application fee for releasing the connection for electricity; rental charges against metering equipment; testing fee for meters/transformers, capacitors etc.; labour charges from customers for shifting of meters or shifting of service lines; charges for duplicate bills provided by DISCOMS to consumers being related services. The question is whether an element of provision of these services is combined with an element or elements of provision of the main service of transmission and distribution of electricity. As noticed earlier, the respondents have themselves treated such related/ancillary services as part of the main service of transmission and distribution of electricity for the pre-negative list regime. Apart, there from, considering this issue independently, reference may be made to certain provisions of the Electricity Act. Sections 43 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... constituted under the provisions of the Electricity Act. In the opinion of this court, all these services are essential activities which have a direct and close nexus with transmission and distribution of electricity. In terms of the earlier clarification dated 7.12.2010 issued vide Circular No.131/13-2010-ST, the Government of India had clarified that an activity, which is an essential activity having direct and close nexus with transmission and distribution of electricity would be covered by the exemption for transmission and distribution of electricity extended under the relevant notifications. Therefore, the taxability of the related/ancillary services are required to be given same treatment as is given to the single service, which gives such bundle its essential character, namely, transmission and distribution of electricity. 24. ************* 25. Thus, insofar as the phase relating to the negative list regime is concerned, the services in question would fall within the ambit of bundled services as contemplated under subsection (3) of section 66F of the Finance Act, and would have to be treated in the same manner as the service which gives the bundle its essential characte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The intention of the appellant and the parties was for supply of coal; for supply of goods; and for availing various types of services. The consideration contemplated under the agreements was for such supply of coal, materials or for availing various types of services. The intention of the parties certainly was not for flouting the terms of the agreement so that the penal clauses get attracted. The penal clauses are in the nature of providing a safeguard to the commercial interest of the appellant and it cannot, by any stretch of imagination, be said that recovering any sum by invoking the penalty clauses is the reason behind the execution of the contract for an agreed consideration. It is not the intention of the appellant to impose any penalty upon the other party nor is it the intention of the other party to get penalized. 28. It also needs to be noted that Section 65B(44) defines "service" to mean any activity carried out by a person for another for consideration. Explanation (a) to Section 67 provides that "consideration" includes any amount that is payable for the taxable services provided or to be provided. The recovery of liquidated damages/penalty from other party cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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