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of <h1>Revenue fails to recover service tax on fixed charges from power generator under electricity sale agreement</h1> <h3>Commissioner of Central Tax and Central Excise, Thiruvannthapuram Versus M/s National Thermal Power Corporation Ltd.</h3> Commissioner of Central Tax and Central Excise, Thiruvannthapuram Versus M/s National Thermal Power Corporation Ltd. - TMI Issues involved: Appeal against Order-in-Original regarding collection of Service Tax on fixed charges for power generation.Summary:The appeal was filed by the Revenue against an Order-in-Original passed by the Commissioner of Central GST and Central Excise, Thiruvananthapuram. The case involved the collection of annual fixed cost by a Public Sector Undertaking from a State Electricity Board under a Power Purchase Agreement. The Revenue alleged non-payment of Service Tax u/s 66E of the Finance Act, 1994. The Commissioner dropped the demand, leading to the Revenue's appeal.The main issue was whether the fixed charges collected for electricity sales constituted a 'Declared Service' u/s 66E(e) of the Finance Act, 1994. The Revenue argued that the charges were for refraining from selling to other buyers, thus falling under 'Declared Service'. However, the Senior Advocate for the appellant contended that as electricity was goods and the charges were part of business requirements, they did not qualify as 'Declared Service'. Reference was made to relevant Circulars and a Tribunal judgment.After hearing both sides, it was found that the fixed charges were part of the sale proceeds of electricity and did not fall under 'Declared Services'. The Commissioner's reasoning was upheld, citing the Power Purchase Agreement and relevant provisions. A Board's Circular clarified that such charges were not taxable, applicable to both GST and Service Tax regimes. The Tribunal's decision in a similar case was also referenced.Based on the clarification and precedents, the appeal by the Revenue was dismissed, upholding the impugned order. The Cross Objection was also disposed of accordingly.
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