2024 (6) TMI 1410

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....ter against the charges in terms of the Agreement dated 25.11.2014. 2. The facts of the case are that the Appellant is engaged in the manufacture of fertilizers at its factory located in Jagatsinghpur district of Odisha. 2.1 The dispute in the present case relates to levy of Service tax on Water charges paid by the Appellant to the Government of Odisha for supply of water against charges/consideration at a specified rate stipulated in the Agreement. 2.2 On the basis of audit, it was observed that the supply of water to the Government from natural water sources, i.e. Taladanda Canal to the Appellant falls under the category of "allocation/auction of natural resources" which are liable to service tax w.e.f. 01.04.2016. The respondent....

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.... as noticed above, deals with supply of water for industrial, urban or other purposes and it provides that the charges shall be as agreed upon between the State government and the company and fixed in accordance with the rules made under the Act. Rule 71A also provides that water may be supplied with the prior permission of the State government for any industrial purpose to a private person at the rates not less than the rates specified in Column (3) of the Table. 17. The Title of the Agreement also shows that it was for supply of water to the industrial power plant. The appellant was required to pay water charges to the government for the water drawn by it from the government water source at the rates fixed by the Water Department....