TaxTMI 
TaxTMI 
2013 (10) TMI 436
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....s issued by the Commissioner of Central Excise, Salem proposing demand of service tax along with interest and penalty for the period May 2006 to June 2008 on this amount charged for the supply of Fly Ash under the category of 'Business Support Service'. By the impugned order, the Commissioner confirmed the demand of service tax of Rs.1,42,29,961/- along with interest and extended cum-tax benefit and also granted relief from penalty under Section 76 and 78 in terms of Section 80 of the Finance Act, 1994. 2. The learned senior counsel submits that GO (MS) No. 629 dated 29.7.1999 was issued by the Government of Tamil Nadu providing guidelines for disposal and utilization of Fly ash. In terms of GO (MS) dated 29.7.1999, they collected the rates Rs.60/- and Rs.40/- per tonne on Dry Fly Ash and Wet Fly Ash respectively from cement and asbestos sheet companies. There is another provision in the said GO (MS) to supply fly ash free of cost for the purpose of laying roads, embankments or for any other construction activity. He submits that GO (MS) dated 29.7.1999 was issued as per the policy of Government of India and they are not rendering any service to anybody. In other words, they are....
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....ly Ash could not be sold and therefore the 'rates' were cost of services. He placed a letter dated 10.5.2007 of the Chief Engineer of Mettur Thermal Power Station stating that service charges collected towards disposal of Fly Ash was for providing infrastructural support service etc. It is his contention that the appellant rendered the service to the cement companies for providing infrastructural support to collect fly ash. During the investigation, the officers unearthed evidences to prove that collection of 'rates' was not for sale of fly ash but for providing infrastructural support as evident from the correspondences and hence extended period has been rightly invoked. 4. After hearing both the sides and on perusal of records, it is seen that Fly ash generated at the Thermal Power Plant containing several heavy metals, caused a potential threat to the environment when disposed of in open areas or dumped into water bodies. Since Fly ash can be used as raw material for manufacture of building materials, such as cement industry, brick manufacturing units etc. Government of India announced various measures all over the country to promote the use of Fly ash in building materials i....
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....for the purpose of manufacturing ash based building materials such as concrete blocks, bricks, panels or any other materials or for construction of roads, embankments or for any other construction activity. (c) Supply of fly ash to cement and asbestos sheet companies at the following rates, being followed at present, shall continue Dry Fly ash : Rs.60 per tone Wet Fly ash : Rs.40 per tonne for the first 5000 tonnes off take per year and Rs.20/- per tone for the balance off take over and above 5000 tonnes per year (d) Procurement tax exemption on fly ash it hereby granted to fly ash users except to cement and asbestos manufacturing companies. (Emphasis by us) 4.4 Ministry of Environment and Forest, Government of India vide final Notification No. S.D. 763 (E) dated 14.9.1999 issued under Section 5 of the Environment (Protection) Act, 1986 and in pursuance of order dated 25.8.1999 of the Hon'ble Delhi High Court in W.P. No. 2145/99 (in the matter of Centre for Public Interest Litigation, Delhi Vs. Union of India), issued direction in detail on disposal of Flyash by Thermal Power ....
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....upply of Fly ash at least ten years and Draft Notification dated 6.11.2008 allowed to sell Fly ash. On the other hand, Government of Tamilnadu issued order dated 29.7.1999 before the issue of the above Notification dated 14.9.1999 directing the Thermal Power Plants to dispose of Fly ash by charging 'a rate' in respect of supply to cement and asbestos sheet companies and free of cost to others. In this context, Chief Engineer (Designs), Tamilnadu Electricity Board issued order vide Per B.P. (CH) No. 401 dated 11.12.2003, for collection of rates as 'service charges' as they cannot sell Fly ash products. As per the said order and direction of Tamilnadu Electricity Board, in the present case, Superintending Engineer issued order for collection and removal of Fly ash from Mettur Thermal Power Station. It appears from Order No. SE/M.II/MTPS/EE-O&ASH/F.56B/10/260/2006 dated 31.8.2006 issued by the appellant to M/s. RBS Ready Mix Concrete, for collection and removal of WET/DRY flyash from Mettur Thermal Power Station, Mettur Dam, service charges of wet/dry Flyash would be collected as per the charges fixed by the Board from time to time. 6. By Notification No. 15/2006-ST dated 24.4.2006....
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....details of service charge collected for fly ash removal. The appellant provided the details of service charge collected for removal of fly ash. 9. A show-cause notice dated 7.10.2008 was issued for the period 1.5.2006 to 30.6.2008 proposing demand of tax of Rs.1,59,81,395/- along with interest and penalty on the said service charges under the category of 'Business Support Service'. It has been alleged that fly ash is collected by the customers from the silo / ash / dyke of the Thermal Plant and the customers are paying service charge for the collection of fly ash to the appellant and the service charge is for providing infrastructure, water, lighting, road maintenance etc. It is further alleged that the service charges received by the appellant from the customers is for providing them the infrastructural support, which the customer subsequently utilized in their industry for production. 10. The appellant in reply to the show-cause notice categorically denied the allegations. It is submitted that they have collected the rates as per the order of the Government of Tamil Nadu and it cannot be a service charge. It is also stated that the expression 'service charge' as mentioned i....
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....ess or commerce. It is seen from the order dated 31.8.2006 issued by the appellant to the cement and asbestos sheet companies for collection and removal of wet/dry Fly ash, that the Fly ash as available should be collected by the companies directly from the SILO/ASH DYRE. The companies have to make its own arrangement for collection and transporting of Flyash. The companies will have to bring its own labour for collection of fly ash, which will be under its own supervision and direction by the officers deputed by the appellant. There is no indication that the appellant had been providing any service to the company for collection and removal of Fly ash. It is apparent from the order that the appellant is supplying Fly ash to the companies, who are collecting it from the site on payment of rates as per Government order. 13. The main contention of the Revenue is that the appellant rendered support service of business or commerce to their customers who have collected fly ash and received a service charge from them for providing infrastructure, water, lighting, road maintenance etc. which is in conformity with the definition of support service of business or commerce. The learned AR ....
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....s sheet companies, we are unable to accept the finding of the adjudicating authority. The expression 'any service provided or to be provided to any person, by any other person' in Section 65(105)(zzq) makes it clear that a person would provide a service to other persons. The Hon'ble Bombay High Court in the case of Indian National Shipowners Association Vs. Union of India & Others -2009 (14) STR 289 (Bom.) observed as under:- From the above judgments the inevitable conclusion that follows is that the services rendered by a person must have a direct or a proximate relation to the subject matter of the taxing entry and the context in which the words 'in relation to' are used has to be borne in mind to judge the extent of the scope of an entry which may be of wide amplitude. In the circumstances of the case services having remote connections cannot be included in entry (zzzy) merely on the strength of the words 'in relation to'. In the present case, we have already stated above that the orders issued by the appellant to the cement and asbestos sheet companies do not disclose that the appellant provided any service to the companies. The appellants as per order of Government of Ta....