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of <h1>Business Support Services characterization for infrastructure provided to cement companies; tribunal precedent leads to service tax demand set aside</h1> Characterisation of infrastructure and related activities supplied to cement manufacturers as 'Business Support Services' was examined against the ... Business Support Services / Support Service of Business or Commerce - Characterisation of transaction as sale of goods - Prohibition on simultaneous levy of service tax and excise duty - precedential weight of tribunal decisions - Whether the Appellant has rendered ‘Business Support Services’ to cement companies as defined u/s 65(104c), by way of providing infrastructure related services such as supply of water for sprinkling, lighting of operational areas, electricity for operation of extraction systems, provision of land for construction of storage silos and parking of vehicles, use and maintenance of internal roads, infrastructure for extraction or collection of dry fly ash, deployment of personnel for gate passes and security. - HELD THAT:- he issue involved in the present case is no more res integra and has been settled by the Tribunal in favour of the assessee in the cases cited supra. In this regard, we may refer to the decision of the Tribunal in the case of M/s Mettur Thermal Power Station vs. CCE & ST, Salem [2014 (12) TMI 594 - CESTAT CHENNAI], wherein identical issue was involved and Chennai Bench of the Tribunal held that demand of service tax under ‘Support Service of Business or Commerce’ is not sustainable. We also find that the said decision of the Tribunal was subsequently followed in the case of Tamil Nadu Generation And Distribution Corporation Limited [2023 (10) TMI 56 - CESTAT CHENNAI], wherein also the demand of service tax was set aside. Thus, we are of the considered view that the impugned orders are not sustainable in law and are liable to be set aside and we do so by allowing both the appeals of the Appellant with consequential relief, if any, as per law. Issues: Whether the amounts collected as 'administrative charges' for supply of dry fly ash constitute consideration for a sale of goods or payment for taxable 'Support Service of Business or Commerce' and whether the impugned demands of service tax are sustainable.Analysis: The matter turns on whether the transaction falls within the statutory definition of sale under the Sale of Goods Act, the Haryana VAT Act and Section 2(h) of the Central Excise Act, 1944, or alternatively constitutes a taxable service under Section 65(104c) of the Finance Act, 1994. Applying the dominant intention test, the transfer of property in dry fly ash for consideration and the regulatory context concerning supply of fly ash indicate the transaction is a sale; incidental provision of infrastructure or facilitation does not convert a sale into a taxable business support service. The Tribunal's prior decisions on identical facts hold that demands of service tax under 'Support Service of Business or Commerce' are not sustainable and set aside similar demands; those precedents are followed.Conclusion: The impugned orders confirming service tax demands are set aside and the appeals are allowed; the decision is in favour of the assessee.
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