TaxTMI 
TaxTMI 
2022 (4) TMI 773
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....anies have identical work and the disputes in these cases are also identical. Except one issue, all issues in dispute in these appeals were earlier decided in Service Tax Appeal No. 51649 of 2019 in respect of Madhya Pradesh Poorva Kshetra Vidyut Vitran Co. Ltd. by a bench of this Tribunal by final order No. 51031 of 2021 dated 14 January, 2021 following the judgment of Gujarat High Court in the case of Torrent Power Ltd. versus Union of India [Special Civil Application No. 5443/2018] decided on December 19, 2018. 3. Aggrieved by the final order dated 14 January 2021 of this Bench, Revenue has filed Civil appeal No. 5973/2021 before the Hon‟ble Supreme Court, which was registered on 24 September 2021 and is still pending. Nevertheless, as the issues have already been decided by the Hon‟ble Gujarat High Court which decision was followed in respect of the same appellant by this Bench, we find no reason to take a different view in the matter. The issues which for consideration are the exigibility to service tax on the following and consequent imposition of penalties upon the appellants for non-payment of Service Tax in respect of the following :- (i) Late payme....
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....ribunal, such as, M/s. Southeastern Coal Fields versus Commissioner of Central Excise and Service Tax, Raipur [Service Tax Appeal No. 50567 of 2019 decided by 51651/2020 dated 22 December 2020] in which it was held as follows: 22. In this connection it would also be pertinent to refer to TRU Circular dated 20 June, 2012 issued by the Central Board of Excise and Customs as an Education Guide when the Negative List based taxation regime was introduced from July 2012 to clarify various aspects of the levy of service tax. The Board dealt with "consideration" in paragraph 2.2 of this Circular and pointed out that since the definition was inclusive, it will not be out of place to refer to the definition of "consideration" as given in section 2(d) of the Indian Contract Act, 187212. The relevant portion of the aforesaid Circular is reproduced below: "2.2 Consideration 2.2.1 The phrase "consideration" has not been defined in the Act. What is, therefore, the meaning of "consideration"? As per Explanation (a) to section 67 of the Act "consideration includes any amount that is payable for the taxable services provided or to be provided. Si....
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....ituation, or to do an act. In other words, the agreement should not only specify the activity to be carried out by a person for another person but should specify the: (i) consideration for agreeing to the obligation to refrain from an act; or (ii) consideration for agreeing to tolerate an act or a situation; or (iii) consideration to do an act. 26. Thus, a service conceived in an agreement where one person, for a consideration, agrees to an obligation to refrain from an act, would be a 'declared service' under section 66E(e) read with section 65B (44) and would be taxable under section 68 at the rate specified in section 66B. Likewise, there can be services conceived in agreements in relation to the other two activities referred to in section 66E(e). 27. It is trite that an agreement has to be read as a whole so as to gather the intention of the parties. The intention of the appellant and the parties was for supply of coal; for supply of goods; and for availing various types of services. The consideration contemplated under the agreements was for such supply of coal, materials or for availing various types of services. The intention of t....
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.... 8 SCC 636 19]. The Supreme Court pointed out that if a party promises to abstain from doing something, it can be regarded as a consideration, but such abstinence has to be specifically mentioned in the agreement. The relevant portion of the judgment is reproduced below: "Under the main agreement, a party had contracted for the conversion of whole arhar grain into dal. Subsequently, by another supplemental agreement, the party agreed to upgrade the dal. It was held that as soon as the first agreement was complied with and dal was delivered, the contract came to an end and the supplemental agreement, which was made subsequently, was a separate and independent agreement. In this agreement, there was no consideration to be given to the promissor and thus that agreement could not be enforced in law. It was claimed that in the supplemental agreement consideration was that the bank guarantees were not to be encashed, but it was found that there was no mention of such a consideration in the supplemental agreement. Although if a party promised to abstain from doing something, it could be regarded as consideration for the contract, but in the present case there was no such case of ....
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....is the purpose of the contract. Liquidated damages are a compensation for failure of the defaulting party to perform as per the contract. Therefore, no service tax can be levied on liquidated damages received under any contract. We find no reason take a different view in this case. 7. The details of the demands and penalties imposed in these appeals are as follows :- Sl.No Appeal No. Issue Involved Duty Involved Penalty Imposed 1 ST/50289/2019 • Late Payment Surcharge • Meter Renting Charges • Supervision Charges • Work Contract Service • Non-payment of Service Tax on l ease rent. Rs. 93,47,59,963/-(in respect of 6 SCN by common order) 1) Rs. 93,47,59,963 /- under Section78 2) Rs. 60,000/-under Section70 (1) 3) Rs. 60,000/-under Section 77(2) 2 ST/50168/2019 • Late Payment Surcharge Rs. 183,88,53,751 /- 1) Rs. 183,88,53,751 /- under Section78 2) Rs. 10,000/-under Section 77 (1) (a) 3) Rs. 10,000/-under Section77(1)(d) 4) Rs. 10,000/-under Section77(2). 3 ST/51066/2019 • Liquid....
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....tue of notifications issued in exercise of powers under sub-section (1) of section 93 of the Finance Act. By virtue of Notification No. 11/2010 dated 27.2.2010, the Central Government exempted transmission of electricity from the whole of service tax leviable thereon under section 66 of the Finance Act; and by virtue of Notification No.32/2010-Service Tax dated 22.6.2010, distribution of electricity came to be exempted from the whole of service tax leviable thereon under section 66 of the Finance Act. Thus, what was exempt under those provisions was transmission and distribution of electricity, despite which, during the pre-negative list regime, the respondents have considered services related to transmission and distribution of electricity as exempted from service tax by virtue of those notifications. Insofar as electricity meters are concerned, vide circular No.131/13/2010-ST dated 7.12.2010, it was clarified that supply of electricity meters for hire to consumers being an essential activity, having direct and close nexus with transmission and distribution of electricity, the same is covered by the exemption for transmission and distribution of electricity extended under relevant....
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....aning of "transmission and distribution services" namely, essential activities having direct and close nexus with the transmission and distribution of electricity. The respondents having themselves considered the services in question as being covered by the exemption for transmission and distribution of electricity as such services were essential activities having a direct and close nexus cannot be now permitted to take a U-turn and seek to exclude such services without pointing out any specific change in the nature of the exemptions, except that they are provided under different statutory provisions. In the opinion of this court, the meaning of "transmission and distribution of electricity" does not change either for the negative list regime or the GST regime. If that be so, the services which stood included within the ambit of transmission and distribution of electricity during the pre-negative list regime cannot now be sought be excluded by merely issuing a clarificatory circular, that too, with retrospective effect. By the clarificatory circular, the respondents seek to give a different interpretation of the very same services as against the clarification issued for the prenega....
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....d to any such line for the purpose of carrying electricity is mandatorily required to be provided to the consumer by the licensee. Moreover, any plant, equipment, apparatus or appliance or any part thereof used for, or connected with, the generation, transmission, distribution or supply of electricity, except for electric meter and any electrical equipment, apparatus or appliance under the control of a consumer fall within the ambit of electrical plant as defined under section 2(22) of the Electricity Act. Sub-section (2) of section 43 of the Electricity Act casts a duty upon the licensee to provide if required electric plant or electric line for giving electric supply to the premises. Therefore, providing electric line and electric plant are elements of service which are naturally bundled in the ordinary course of business, with the single service of transmission and distribution of electricity which gives the bundle its essential character. The only related service which does not fall within the ambit of the definitions of electric line and electric plant is the meter used for ascertaining the quantity of electricity supplied to any premises. However, insofar as installation of e....
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.... from the aforesaid judgment of the Gujarat High Court that the activities that are related/ancillary to transmission and distribution of electricity would be exempt from payment of service tax since transmission and distribution of electricity is exempted. It is also clear from aforesaid decision that all services related to transmission and distribution of electricity are bundled services, as contemplated under section 66F(3) of the Finance Act, and are required to be treated as a provision of a single service of transmission and distribution of electricity, which service is exempted from payment of service tax. 29. Thus, for all the reasons stated above, it is not possible to sustain the levy of service tax on the amount collected by the appellant for late payment surcharge, meter rent and supervision charges. 30. The issue that now remains to be decided is about the levy of penalty on the lease rent collected from the customers. The appellant claims that since it has deposited the lease rent, the levy of penalty may be set aside. It is not possible to accept this contention of the learned counsel for the appellant. The imposition of penalty under 'lease rent&#....