Tribunal rules reimbursement of electricity charges not subject to service tax

The Tribunal allowed the appellant's appeal, ruling that the reimbursement of electricity charges at 2% extra was akin to a sale of goods, not a supply of service. The charges were deemed goods chargeable under the Central Excise Tariff and State Value Added Tax Act, exempt from service tax. The Tribunal held that the appellant's service of Renting of Immovable Property was subject to service tax but clarified that the reimbursement of electricity charges did not fall under the purview of service tax, overturning the lower authorities' decision.

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Issues:
1. Appeal against Order-in-Appeal confirming demand of service charges for electricity paid in advance.
2. Invocation of extended period of limitation by the Revenue.
3. Classification of reimbursement of electricity charges at 2% extra as a taxable entity.
4. Interpretation of electricity charges as goods or services for tax purposes.

Analysis:
1. The appellant challenged the Order-in-Appeal confirming the demand of service charges for electricity paid in advance. The appellant argued that the Revenue erred in invoking the extended period of limitation for the dispute spanning 2003-04 to 2006-07.
2. The appellant contended that they paid electricity charges upfront for convenience, recovering them later from tenants with a 2% margin. They asserted that they paid service tax under Renting of Immovable Property, not managing tenants' property, thus denying a service provider-client relationship.
3. The appellant cited the Mumbai Tribunal's decision in M/s. ICC Reality (India) Pvt. Ltd. v. Commissioner of C. Ex., Pune-III, supporting their stance on the nature of electricity charges reimbursement.
4. The Revenue supported the lower authorities' findings, prompting a detailed analysis by the Tribunal. After considering the contentions and precedents, the Tribunal focused on whether the reimbursement of electricity charges at 2% extra constituted a taxable entity.
5. The Tribunal determined that the appellant's service of Renting of Immovable Property was subject to service tax. However, the reimbursement of electricity charges was akin to a sale of goods, not a supply of service, as per the Mumbai Tribunal's ruling. The electricity charges were deemed goods chargeable under the Central Excise Tariff and State Value Added Tax Act, exempt from service tax under Notification No. 12/2003-ST.
6. Consequently, the Tribunal concluded that the lower authorities' order was unsustainable. Following the precedent, the Tribunal allowed the appeal, providing consequential benefits as per the law. The judgment clarified that the reimbursement of electricity charges by the appellant did not fall under the purview of service tax.

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