TaxTMI 
TaxTMI 
2026 (6) TMI 1474
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....ant. To carry out the aforesaid activities, duly registered with the Service Tax authorities under the taxable category "Management, maintenance or repair service" and "Renting of Immovable Property". 2.1 In order to ensure uninterrupted power supply to the occupiers, the Appellant had entered into an agreement with CESC Limited that permitted the Appellant to transform/convert high-tension electricity into low tension electricity and distribute it to the occupiers. The Appellant recovered charges from the occupiers towards such redistribution/sale of electricity. Further, the Appellant, as a financial safeguard, collected a refundable maintenance deposit from the occupiers as a security against potential defaults in the payment of monthly maintenance, electricity, or common expenses. 2.2 Proceedings were initiated vide issuance of periodical Show Cause Notices covering the periods 2007-08 to 2011-12 (SCN dated 16.10.2012) and 2013-14 to 2014-15(SCN dated 14.10.2015). Both the Show-cause notices primarily alleged that the electricity charges recovered from occupants constituted taxable consideration for "management, maintenance, or repair service". The proceedings initiated v....
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....13) by this Tribunal. The issue at hand is further covered by the decision of the Hon'ble Tribunal in Commissioner v. M/s DLF Infocity Developers (Kolkata) Ltd. [2025 (8) TMI 1658-CESTAT Kolkata] whereby, after extensive consideration of various landmark judgments of the Hon'ble Supreme Court, it was categorically held that the supply of electricity to occupiers/tenants constitutes a sale of goods and is entirely outside the ambit of service tax liability. 3.2 It is further submitted that given the settled jurisprudence and the specific facts of the Appellant's case, the recovery of electricity charges cannot be repositioned as a taxable service, and the impugned Order-in-Appeal sustaining such a demand is wholly contrary to law and liable to be set aside. 3.3 It is further submitted that the Appellant collects security deposits from occupiers at a nominal rate of Rs.12/- per sq. ft. of the super built-up area solely as a financial safeguard. Under the governing maintenance agreement, these deposits are strictly refundable and can only be adjusted in the event of a default by the occupier in clearing their monthly maintenance, electricity, or common expenses. Therefore, u....
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....former for supply of electricity are liable to taxed under the category of "Management, Maintenance or Repair Service" or not ? 7. The said issue has been dealt with by this Tribunal in the case of Commissioner of CGST & Central Excise, Kolkata Vs. M/s DLF Infocity Developers (Kolkata) Ltd. reported in 2025 (8) TMI 1658-CESTAT-Kolkata, wherein this Tribunal has observed as under : "6. The sole issue emerges here that the respondents are supplying electricity to their tenants, so whether the supply of electricity is "goods" or not ? 7. The said issue has been examined by the by the Hon'ble Madras High Court in the case of Kumbakonam Electric Supply Corporation Ltd. Versus Joint Commercial Tax Officer, Esplanade Division Madras - 1963 (9) TMI 43 - Madras High Court, which has been affirmed by the Hon'ble Apex Court in the case of Commissioner of Sales Tax, Madhya Pradesh, Indore Vs. Madhya Pradesh Electricity Board, Jabalpur (supra), wherein electricity has been held as goods. Same view has been taken again by the Hon'ble Apex Court in the case of State of AP & Others versus National Thermal Power Corporation Ltd. And Others (supra), wherein after relying o....
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....ting authority in the impugned order. Therefore, we do not find any infirmity with the impugned order and the same is upheld." 8. As the supply of electricity is a transaction of sale of goods, therefore, no service tax is payable by the appellant. In view of this, we hold that the appellant is not liable to pay service tax under the category of "Management, Maintenance or Repair Service". Consequently, no service tax is payable by the appellant on account of supply of electricity or installation of transformer. Therefore, we set aside the impugned order. Consequently, no penalty is imposable on the appellant. 9. In these terms, the appeal is allowed with consequential relief, if any." 8. In view of the above decision in the appellant's own case, the Issue No.(i) is no more res integra and the same is covered in favour of the appellant. Issue (ii) Whether the maintenance deposits collected by the Appellant from tenant/unit holders could be construed as an advance payment towards provision of a taxable service when such deposits were adjustable only in the event of a default and no evidence adduced to show that these were at all adjusted during the r....