2017 (9) TMI 83

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....orporation (CSIDC) in terms of the agreement entered into with erstwhile M.P. State Industrial Development Corporation in 1998. In terms of the agreement, the appellants are to own, develop, operate and maintain water supply in Borai Industrial Growth Centre. The appellants were paid by CSIDC as per the tariff agreed upon for supply of water. Revenue entertained a view that the arrangement between the appellant and the CSIDC, for such supply of water, will be covered for service tax purpose under the category of "Support Services of Business or Commerce" under Section 65(105)(zzzq) of Finance Act, 1994 read with Section 65(104)(c). Accordingly, the proceedings were initiated against the appellant, which concluded by the impugned order with ....

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....ns and cannot be taxed for service. The impugned order refers to supply of water by CSIDC to various industrial consumers to contend that the appellant provided business support in such activities. As clearly mentioned under clause 5.3, Note I of the agreement, the appellant has nothing to do with the actual users of the water i.e. various industries/units/companies, etc. (d)    CSIDC is using the water supplied by the appellant for various designated purposes, which is not having any bearing to the sale of water by the appellant as they have no dealing or knowledge or control of ultimate usage of the water. 3. Ld. AR contested the submissions of the appellant. He specifically drew our attention to Para 6.3 of the ....

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....rty. This is clear from Note I under the tariff structure in the agreement. Further, CSIDC has been treated as consumer of water (Clause 5.3E) for payment of taxes on water supply to the concerned State Department. We find that the whole scope of the agreement is for supply of water by the appellant to CSIDC on a fixed tariff. CSIDC, thereafter supplied the water to various industrial units is of no consequence for the said arrangement as far as the appellant is concerned. In such situation, giving colour of service to pure sale of water is not legally tenable. One more aspect of the case is the scope of the statutory definition in the tax entry for BSS. The tax entry reads as below :- "Support Services of Business or Commerce" means ser....