TaxTMI 
TaxTMI 
2026 (8) TMI 1753
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.... for the periods 2013-14 and 2014-15, respectively. The demand of service tax was confirmed along with interest and penalties by classifying the services provided by the assessee under 'Management, Maintenance or Repair Service' instead of 'Works Contract Service' as claimed by the assessee. Appeal No. ST/60754/2017 has been filed by the assessee against this order. 1.2 By way of Order-in-Original dated 12.06.2018, the learned Commissioner, Rohtak, adjudicated the Show Cause Notice dated 18.05.2017 for the period 2015-16, confirming the service tax demand on account of short payment due to classification difference, along with interest and penalties. However, the learned Commissioner dropped the demand proposed on electricity income under the head of 'transmission or distribution of electricity'. Aggrieved by the confirmation of demand, the assessee filed Appeal No. ST/61595/2018, whereas the Revenue filed Appeal No. ST/61721/2018 against the portion of the order where the demand on electricity income was dropped. 1.3 Since the facts involved in all these three appeals are identical, the same are being disposed of by way of this common final order. ....
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....ntract' to the assessee solely on this ground. Aggrieved by the confirmation of demands, the assessee has filed the present appeals, i.e., ST/60754/2017 and ST/61595/2018. 3. Heard both sides and perused the material on records. 4. The learned Counsel for the assessee-appellant submitted that the impugned orders are not sustainable in law as the same have been passed without properly appreciating the facts and the law and the binding judicial precedents on the identical issue. 4.1 He further submitted that in both the appeals filed by the assessee involving identical facts and issues, the Department has erroneously disallowed the benefit of abatement on 'Works Contract Service'. This denial is on the alleged ground that "there is no evidence of transfer of property in goods" involved in the execution of the works contract. Elaborating further, he stated that under the erstwhile positive list regime prior to 01.07.2012, the assessee had been paying service tax under the category of 'Management, Maintenance or Repair Service'. However, after the introduction of the Negative List regime w.e.f. 01.07.2012, the assessee started paying service tax under the category of 'Works Co....
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....sore - 2009 (16) STR 172 (Tri. Bang.) 5. On the other hand, the learned Authorized Representative for the Department justified the impugned orders on the ground that the assessee has failed to prove before the learned Commissioner by way of documentary evidence that the impugned services fall within the definition of 'Works Contract Service' as defined under the Finance Act, 1994. He further submitted that the assessee has failed to produce on record statutory VAT returns and specific material-consumption invoices to demonstrate that the requisite goods or materials were purchased and actually utilized for rendering the services of 'Management, Maintenance or Repair'. 6. We have considered the submissions made by both the parties and perused the material on record as well as the case laws relied upon by the learned Counsel for the assessee. We find that prior to 01.04.2013, the assessee had been paying service tax under the category of 'Management, Maintenance or Repair Service'. However, after the introduction of the Negative List regime (w.e.f. 01.07.2012), the assessee started paying service tax under the category of 'Works Contract Service' with effect from 01.04.2013 and....
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....Supreme Court in the case of Kone Elevator India Pvt Ltd (supra) held as under: "63. Considered on the touchstone of the aforesaid two Constitution Bench decisions, we are of the convinced opinion that the principles stated in Larsen and Toubro (supra) as reproduced by us hereinabove, do correctly enunciate the legal position. Therefore, "the dominant nature test" or "overwhelming component test" or "the degree of labour and service test" are not applicable. If the contract is a composite one which falls under the definition of works contracts as engrafted under clause (29A)(b) of Article 366 of the Constitution, the incidental part as regards labour and service pales into total insignificance for the purpose of determining the nature of the contract." 8.2 The Bangalore Bench of the Tribunal in the case of Wipro GE Medical Systems Pvt Ltd vs. Commissioner of Service Tax (supra) held as under: "8. On a very careful consideration of the fact, we find that there is no dispute with regard to the leviability of service tax on the maintenance and repair services. The main point of dispute is with regard to the valuation. However, Section 67 of the Finance Act clearly....
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....sidered as sold and when sales tax has been paid on the value of such goods, simultaneously one cannot charge them to the service tax. In view of these clear legal provisions, there is absolutely no justification for levy of service tax beyond 30% of the value of the total contract. We would like to state that the data provided by the appellant shows that the adoption of 30% of the value of the contract towards value of services rendered appears to be reasonable in the light of the payment of sales tax on the 70% value which has also been accepted. Therefore, this valuation cannot be said to be arbitrary. In these circumstances, we do not find any merit in the impugned orders. Since, the demand of duty is not sustainable the demand of interest, penalty etc. also are not justified. Hence, we allow the appeals with consequential relief." The above-said decision of the Tribunal was challenged by the Revenue before the Hon'ble Supreme Court. However, the Hon'ble Supreme Court vide order dated 07.09.2009 dismissed the Department's appeal, thereby affirming the decision of the Tribunal, as reported in Commissioner of Service Tax vs. Wipro GE Medical Systems Pvt Ltd - 2012 (28) S.T.R. ....
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....red in reducing the demand by Rs. 16,20,173/-. 11.2 He further argued that the assessee had collected electricity charges under two distinct categories: (a) for the electricity distributed by the assessee to the premises of individual users after obtaining bulk supply from the electricity authority, and (b) for the supply of electricity generated through its in-house generator sets. 11.3 He further emphasized that post the introduction of the Negative List regime, as per Section 66D(k) of the Finance Act, 1994, the Negative List comprises services by way of: "(k) transmission or distribution of electricity by an electricity transmission or distribution utility". He submitted that Section 65B(23) of the Finance Act, 1994, strictly defines an 'electricity transmission or distribution utility'. In view of this statutory definition, the assessee-respondent does not qualify as a utility because it has not obtained any requisite licence under the Electricity Act from the State Electricity Board or the appropriate Authority. 11.4 He also placed reliance on the Education Guide published by the CBEC on 20.06.2012, which clarifies the scope of 'transmission or dist....
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....Bench of the Hon'ble Supreme Court in the case of State of A.P. vs. National Thermal Power Corpn. Ltd. and Ors. - 2002 (5) SCC 203. Consequently, he submitted that electricity being universally recognized as 'goods', its supply by one person to another must be construed as a 'sale of goods'. 12.3 He further argued that the levy of service tax under the charging Section 66B of the Finance Act, 1994, is strictly on the value of 'services', and the statutory definition of 'service' provided under Section 65B(44) of the Act explicitly excludes any activity which constitutes merely a transfer of title in goods by way of sale. 12.4 He also placed reliance on the decision of the Kolkata Bench of the Tribunal in the case of CCE, Kolkata vs. DLF Infocity Developers (Kolkata) Ltd. - Final Order No. 77354/2025 dated 28.08.2025, wherein the Tribunal has decided the identical issue in favour of the assessee. 12.5 He vehemently argued that the supply of electricity under an identical set of agreements by the assessee-respondent has already been held as a 'sale of goods', and the demand for service tax was dropped by the Revenue itself in the cases of the assessee's other group u....
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....rably failed to produce any evidence on record to prove that the assessee-respondent had ever collected service tax from its individual flat owners for the supply of electricity. 13.4 We also find that subsequent to the decision of the Hon'ble Calcutta High Court in Srijan Realty (P) Ltd, the Kolkata Bench of the Tribunal in the case of M/s Unmesh Properties Pvt. Ltd. (supra), took note of the said High Court judgment. By placing reliance on the settled legal position laid down by the Hon'ble Apex Court as well as other coordinated Benches of the Tribunal on identical issues, the Kolkata Bench held as under: "6. The sole issue involved in this matter is that whether the supply of electricity and installation of transformer 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 supp....
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....ly, 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." 13.5 Furthermore, it is a matter of record that the Committee of Chief Commissioners of Service Tax and Central Excise, Panchkula & Delhi, jointly vide Review Order dated 10.11.2017, accepted the legal proposition that the supply of electricity, being a transaction involving 'goods', is outside the purview of service tax. This position was accepted while reviewing the Orders-in-Original dated 09.06.2017 and 19.03.2018 (supra) passed by the lower authorities in the cases of the assessee-respondent's other group units. 13.6 We are of the firm view that electricity is globally recognized as 'goods', and the activity of supplying electricity to users against payment constitutes nothing but a 'sale of goods'. Consequently, it falls outside the ambit of service tax. This view stands fortified by the decision of the Kolkata Bench of this Tribunal in the case of CCE, Kolkata v....