TaxTMI 
TaxTMI 
2024 (9) TMI 1967
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....ion to the lease rent charges. DG Sets were also installed on the premises of the Respondents to provide uninterrupted supply of electricity to the tenants. As per the lease deed, the Respondent has installed meters on its premises at its own cost and was providing 40% of the electricity consumption from the State Electricity Board at State Electricity Board rates and the balance power was being provided through DG Sets at actuals. Respondent was collecting the amount for the electricity provided on actual basis from the tenants. Therefore, Respondent, apart from providing the renting of immovable property services, was also trading electricity. It is the case of the Respondent that the amount recovered on account of electricity charges have been in the nature of reimbursement of expenses on the actual basis and since electricity is goods covered by entry 54 of List II of Schedule VII of the Constitution of India, service is not leviable upon it. An audit was conducted for the period from May, 2010 to March, 2011 on 26.07.2012 and it was observed by the Department that the Respondent was providing renting of immovable property alongwith maintaining DG Sets for the uninterrupted sup....
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....h Electricity Board, Jabalpur [1969 (2) SCR 939], wherein the specific issue under consideration, as to whether the electricity is 'goods' or not, was considered. While considering the definition of 'goods', as provided under Article 366 (12) of the Constitution, the Apex Court held that electricity is also goods. b. The OIO also relied upon the judgment of the Supreme Court in State of A.P. v. National Thermal Power Corporation Ltd. & others [2002 TIOL-107-SCCT] wherein the decision given in the case of Madhya Pradesh Electricity Board was affirmed with slight modification that 'electric energy' cannot be stored. Thus, the OIO aptly concluded that electricity is goods. c. The OIO further observed that in respect of electricity, the processes of generation/transmission/distribution/supply/consumption/sale are simultaneous and inseparable in respect of the establishments, who are engaged in generation of electricity and thus, the activities of transmission and distribution should not be ascertained or determined in isolation in case of such establishments. The sale of electricity completes only after the generated electricity transmitted/distrib....
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...., the presence of two different services is mandatory. However, in the present case, one activity of the Respondent constitutes the service of renting immovable property, and the other activity constitutes the trading of electricity. Therefore, there cannot be any bundling of services. 3. We find that the issue is no more res integra and has been decided by the Tribunal in the case of Principal Commissioner, CGST & Central Excise, Lucknow vs. M/s India Housing in Service Tax Appeal No.70033 of 2020, vide Final Order No.70501/2024 dated 31.07.2024. We find that the trading of goods had been in negative list under provisions of section 66D(e), as amended. Further, generation of Electricity by Installed DG sets was a process amounting to manufacture or production of goods defined under the section 65B(40) of the Act ibid, as the electricity is goods covered by entry 54 of the List II of Schedule VII of the Constitution of the India. Also, electricity is in Excise Tariff under 27160000, hence, it is not liable to service tax. 4. We further find that keeping in view the correct legal position and by relying upon the relevant case laws, the adjudicating authority in the OIO conclud....
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....eration vs. State of Odisha & Another, W.P.(C) No.17017 of 2014, judgment dated 30-03-2015, Orissa High Court. ⮚ Mettur Thermal Power Station vs. CBEC & CCE, W.P. No.17282 of 2014, judgment dated 15-07-2015, Madras High Court. ⮚ CMS (India) Operations and Maintenace Co (P) Ltd. vs. CCE, 2007 (07) S.T.R. 369 (Tri. Chennai) further affirmed by the Supreme Court in 2017 (4) G.S.T.L. 175 (SC). ⮚ NTPC Sail Power Co P. Ltd. vs. CCE, Bolpur, 2012 (277) E.L.T. 221 (Tri. - Kolkata). ⮚ State of A.P. vs. National Thermal Power Corporation Ltd. & others (2012 TIOL-107-SC-CT). 7. We also find that with regard to the demand of the tax in the pre-negative service tax regime, the Adjudicating Authority, after analyzing the lease deeds and the ledgers of the Respondent, comprehensively and meticulously, concluded that the Respondent was collecting three different charges/amounts from its tenants, namely, (a) Rent of the leased portion of the complex (b) Common Area Maintenance Charges (CAM Charges) (c) Electricity charges: subject to the condition, that the Lessor must ensure that the said complex includin....