TaxTMI 
TaxTMI 
2026 (2) TMI 16
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....specified rate stipulated in the Renewal Agreement dated October 14, 2015. 2.2. The present dispute emanates from the audit of financial records, which observed that supply of water by the Government from natural water sources, i.e., River Baitarani to the appellant falls under the category of "allocation / auction of natural resources" which is liable to Service tax w.e.f. 01.04.2016. The authorities observed that the liability has arisen in terms of Sl. 59 of Notification No. 25/2012-ST dated 20.06.2012 as amended vide Notification No. 22/2016-ST dated 13.04.2016 read with Circular no. 192/02/2016-ST dated 13.04.2016. 2.3. A Show Cause Notice dated February 12, 2020 was issued proposing the demand of Service tax against the appellant along with interest and equivalent penalty to the Service Tax imposed on the appellant. 2.4. The appellant duly filed its reply rebutting the allegations and submitted that the agreement pertains to supply of water, which falls within the definition of "goods", and is not leviable to Service tax. However, without considering the contentions of the Appellant, the demand was confirmed by the Order-in-Original dated August 30, 2024 on the follo....
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....ubaneswar. 2.6. The matter was adjudicated. The Ld. Adjudicating Authority, wherein the Ld. Commissioner (Appeals) confirmed the demand on the following grounds: (a) The agreement mentions certain charges to be paid in advance and a deposit to be made covering the value of the agreement. Such conditionalities are imposed as a safeguard against exploitation of the underlying property and would not have been the case had it been an absolute transfer of goods. Hence, the basic tenet of the agreement is that of grant of a licensing right. (b) The Government has not made any arrangements for supply of water and the same is made by the Appellant themselves. The Government of Odisha has only granted the Appellant a right to draw water. Since the transaction is that of supply of licensing rights, the judgment in the case of M/s. Sasan Power Limited is not applicable. (c) The Appellant has availed licensing rights from Government which is of the nature of a 'service' and therefore liable to Service tax. 2.7. Being aggrieved with the said order, the appellant is before us. 3. The Ld. Counsel appearing on behalf of the appellant submits that the agr....
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....In the present case: (i) The rate is fixed at Rs. 3.40 per cubic meter; (ii) Payment is based on actual quantity of water drawn/consumed; (iii) The consideration is directly proportional to volume of water received. This variable nature of payment linked to volume is the hallmark of sale of goods. 3.6. In support of his contention, he relied on the following cases: (i) Paradeep Phosphates Limited v. Commissioner of CGST & CE [2024 (6) TMI 1410 - CESTAT Kolkata] (ii) Sasan Power Limited v. Commissioner [2024 (5) TMI 326 - CESTAT New Delhi] (iii) National Aluminium Company Ltd. v. Commissioner [2024 (9) TMI 1824 -CESTAT Kolkata] (iv) Indian Oil Corporation Ltd. v. Commissioner [2024 (10) TMI 1129 - CESTATKolkata] (v) Steel Authority of India Ltd. v. Commissioner [2024 (9) TMI 1826 - CESTAT Kolkata] (vi) Radius Water Ltd. vs. CCE & ST, Raipur - 2017 (51) STR-11 (Tri-Del). The revenue appeal filed against the said decision has been dismissed by the Supreme Court as reported in 2018 (16) GSTL J 80 (SC). Accordingly, the entire proceedings are liable to be set aside on this ground alone. 3.7. He fur....
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....to Service tax. 3.11. No tax shall be levied or collected except by authority of law as per Article 265 of the Constitution of India. The subjects on which the laws can be made by the Parliament and States are specified in Article 246 which empowers the Parliament to make laws with respect to any subject in List I (Union List) and the State Legislatures to make laws with respect to any subject in List II (State List) of the seventh schedule of the Constitution. Both can legislate on the subjects in List III (concurrent list). All residuary powers are given to the Parliament by Entry 97 of List I as „Any other matter not enumerated in List II or List III including any tax not mentioned in either of those Lists‟. Thus, the Parliament has unlimited power of taxation on any subject not covered in the State List or Concurrent List, subject only to the provisions of the Constitution. 3.12. However, by the 46th amendment, the constitutional position has been modified by inserting an enlarged definition of „tax on sale or purchase of goods‟. Before the amendment, the scope of taxation of the States was limited and everything else fell under the purview of the ....
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....od of limitation is not invokable as there was no suppression of facts with intent to evade payment of Service tax. The entire information was available on record from the audit of financial records of the Appellant. The issue involves bona fide interpretation of statutory provisions and the Appellant was under a genuine belief that no Service tax was payable. 3.19. Finally he prays that no interest is leviable and in the case of bonafide interpretation of statutory provisions, no penalty is imposable. 4. The Ld. Authorized Representative has justified the impugned order. 5. Heard both sides and considered the submissions. 6. We find that the short issue involved in the matter is that whether Service Tax can be levied on water charges paid by the appellant to Government of Odisha for supply of water against charges consideration at a specified rate as per the agreement by providing license to draw the water. The said issue has been examined by this Tribunal in the case of National Aluminium Company Ltd.(Supra) wherein this Tribunal observed as under: "6. We find that the present issue has been settled by this Tribunal in the case of Paradeep Phosphates Limited ....