Supply of Electricity and Water Classified as Sale of Goods, Not Subject to Service Tax Under Relevant Rules

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....The CESTAT held that the supply of electricity and water to the recipients constitutes a sale of goods, not a business support service, and is therefore not subject to service tax. The tribunal observed that business support services pertain to outsourced activities ordinarily performed by the entity itself, which does not include the supply of electricity and water. The demand for service tax for the period 2007-08 to 2014-15 was found unsustainable, particularly for the post-01.07.2012 period where provisions invoked were deleted. Additionally, payment under an incorrect service category does not justify confirmation of demand. Consequently, the service tax demand was set aside, and the appeal was allowed, affirming that the transaction falls outside the ambit of service tax liability.....