2025 (7) TMI 1540

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....e Appellant') is inter alia engaged in the manufacture of Iron and Steel Products falling under Chapter 72 and 73 of the First Schedule to the Central Excise Tariff Act, 1985. The Appellant is also registered under the Service Tax laws bearing Registration No. AAACS7062FST046 for discharging service tax under the categories of renta- cab service, consulting engineering service, manpower recruitment supply agency service, maintenance or repair service, transportation of goods by road, renting of immovable property service, works contract service and accommodation service. 2.1. During the relevant period, the Appellant entered into agreement with Ferro Scrap Nigam Limited ('FSNL') under which FSNL was engaged for recovery of scrap from slag, iron skulls, blast furnace, etc. For this purpose, FSNL has been allocated an area within the factory premises of the Appellant wherein FSNL carries out the job of recovery of scrap from slag. As per the terms of the agreement, the Appellant was to provide certain facilities to FSNL in the form of supply of electricity, water, residential accommodation to the employees of FSNL and supply of stores for carrying out the work, against considerati....

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....same as being exigible to service tax holding the same to be a service is grossly incorrect. In support of this view, the appellant cited the decision in the case of Kumbakonam Electric Supply Corporation Ltd. Versus Joint Commercial Tax Officer, Esplanade Division Madras, 1963 (9) TMI 43 - Madras High Court, affirmed by Hon'ble Supreme Court in the case of Commissioner of Sales Tax, Madhya Pradesh, Indore Vs. Madhya Pradesh Electricity Board, Jabalpur, 1968 (11) TMI 85 - Supreme Court, wherein electricity has categorically been held to be goods. Similar proposition has been upheld in the case of State of AP & Others versus National Thermal Power Corporation Ltd. And Others, 2002 (4) TMI 694 - Supreme Court, which has inter alia relied upon the Hon'ble Apex Court judgment pronounced in the case of Madhya Pradesh Electricity Board (supra), to hold electricity as goods. 3.1. Further, even water has been held to be goods in the case of Radius Water Ltd. v. Commissioner of Central Excise, & S.T., Raipur - 2017 (51) S.T.R. 11 (Tri. - Del.) affirmed byHon'ble Supreme Court in Commissioner v. Radius Water Ltd. - 2018 (16) G.S.T.L. J80 (S.C.). Similar proposition has been upheld in the ....

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....rsus Commissioner Of Customs, C. Ex. & S.T., Noida [2020 (41) G.S.T.L. 633 (Tri. - All.)], wherein it has been held that while interpreting the scope of the expression "Support Service of Business & Commerce" under [Section 65(104c)] and also of the term "Infrastructural Support Service" in Explanation to Section 65(104c), the principle of noscitur-a-sociis would be applicable and accordingly the expression "Support Service of Business or Commerce" as defined under Section 65(104c) would cover only the service which are of supporting nature to the main business, like services relating to customer relationship, evaluation of prospective customers, tele-marketing, distribution and logistics, transaction, processing, office infrastructure etc. and would not cover the services of renting of machinery and equipment for production or manufacture which is an activity relating to conduct of the main business. The Hon'ble Tribunal while passing the said judgment relied upon the judgment of Air Liquide North India Pvt. Ltd. v. Commissioner - 2017 (4) G.S.T.L. 230 affirmed by Hon'ble Rajasthan High Court in Commission of Central Excise & Service Tax v. Air Liquide North India Pvt. Ltd. report....

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....upplied water and electricity to FSNL and GMGL under agreement and collected consideration towards sale of such goods. The Department considered that the supply of electricity, water, etc. are liable to service tax under the 'Business Support Service'. For ready reference, the definition of business support service as defined under Section 65(104c) of the Finance Act is extracted as below: 65. Definition.- In this Chapter, unless the context otherwise requires, (104c) "support services of business or commerce" means services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfilment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operational or administrative assistance in any manner, formulation of customer service and pricing policies, infrastructural support services and other transaction processing. Explanation.-For the purposes of this clause, the expression "infrastructural support services" includes providi....

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.... as contemplated in the definition of Business Support Services and therefore would not be taxable under the category of 'Business Support Services'." 6.3. In this regard, it is also pertinent to refer the Circular No. 157/8/2012-ST dated 27.4.2012, issued by Board wherein it is reiterated that the nature of services covered under 'business support services' are in the nature of 'outsourcing services'. In the present case, we find that the activities assigned by the appellant to FSNL and GMGL are mainly to ensure smooth working within the premises of the Appellant and the same cannot be said to be in the nature of an outsourced activity. Thus, we hold that the subject transaction under discussion cannot be said to fall within the ambit of business support service. 6.4. In the present case, we find that the transaction of supply of electricity and water to FSNL and GMGL amounts to sale of goods, viz. electricity and water. Hence, construing the same as being exigible to service tax holding the same to be a service is grossly incorrect. In this regard, we observe that the demand confirmed in the impugned order pertains to the period 2007-08 to 2014-15. Thus, it ....