Tribunal rules disposal of fly ash not taxable service, upholds no service tax on collection.

The Tribunal dismissed the Revenue's appeal regarding the taxation of disposal of fly ash by a thermal power station, holding that it did not constitute a taxable service under business support services. Additionally, the Tribunal upheld the ruling that the collection and removal of fly ash did not attract service tax as it was considered a sale of the product rather than a service provided. The tax liability on the assessee was rightly deleted by the Commissioner, resulting in the dismissal of the Revenue's appeal.

---

---

Issues involved:
The issues involved in the judgment are whether the activity of disposal of fly ash by a thermal power station constitutes a taxable service under business support services, and whether service tax is applicable on the collection and removal of fly ash.

Issue 1: Taxability of disposal of fly ash under business support services:
The appeal was filed by the Revenue against the Order-in-Original passed by the Commissioner of Central Excise, Tirunelveli, regarding the taxation of the disposal of fly ash by M/s. Tuticorin Thermal Power Station (TTPS). The Revenue issued Show Cause Notices proposing to demand service tax on business support service for the period from May 2006 to December 2011. The assessee contended that the disposal of fly ash was not a taxable service as it was done in compliance with government regulations and was not for profit. The Commissioner considered the explanation offered by the assessee and held that the disposal of fly ash by TTPS did not constitute a taxable service under business support services. The Revenue appealed this decision.

Issue 2: Applicability of service tax on collection and removal of fly ash:
The Revenue argued that the activity of providing infrastructural support services, including the collection and removal of fly ash, should be subject to service tax. They contended that the charges collected by TTPS indicated the provision of services like infrastructure maintenance and technical expertise. However, the Tribunal noted that a similar issue had been considered in a previous case involving Mettur Thermal Power Station, where it was held that the consideration received for the supply of fly ash was for the sale of the product and not for any service provided. The Tribunal upheld the ruling of the previous case and concluded that the tax liability on the assessee was rightly deleted by the Commissioner. Therefore, the Tribunal dismissed the appeal filed by the Revenue.

Separate Judgement:
No separate judgment was delivered by the judges in this case.

---