CESTAT Chennai: Supplying Fly Ash to Cement Manufacturers Not a Business Support Service

The CESTAT Chennai ruled in favor of the appellant, determining that supplying fly ash to cement manufacturers did not amount to business support service under the Finance Act, 1994. The Tribunal considered previous decisions and set aside the Service Tax demands, allowing the appeals with any consequential benefits as per law.

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Issues involved:
The issue involves determining whether the appellant, a Government of Tamil Nadu undertaking engaged in electricity generation, is liable to pay Service Tax for supplying fly ash to cement manufacturers under the category of business support service as alleged by the Revenue.

Summary of the Judgment:

Issue 1: Alleged demand of Service Tax for supplying fly ash as business support service
The Revenue issued Show Cause Notices proposing to demand Service Tax for the period from May, 2006 to September, 2010 for supplying fly ash to cement companies under the category of business support service. The Adjudicating Authority confirmed the demands in Orders-in-Original. The appellant challenged these demands before the CESTAT Chennai.

Issue 2: Interpretation of the term "business support service"
The main issue for consideration was whether the appellant's activities of supplying fly ash to cement manufacturers constitute business support service under Section 65(104c) of the Finance Act, 1994. The appellant argued that the issue had already been settled in the cases of its sister concern by the Chennai Bench of the CESTAT.

Court's Decision:
After considering the arguments and previous decisions, the CESTAT Chennai held that the disputed activities of the appellant cannot be treated as business support service. The Tribunal had already set aside similar demands in the appellant's sister concern's case. Therefore, the impugned orders demanding Service Tax were set aside, and the appeals were allowed with consequential benefits, if any, as per law.

Conclusion:
The CESTAT Chennai ruled in favor of the appellant, holding that the supply of fly ash to cement manufacturers did not constitute business support service, based on previous decisions and the interpretation of relevant legal provisions.

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