Case Law Details
Ruchi Soya Industries Ltd Vs Commissioner of Customs (CESTAT Delhi)
Amount received by the appellant in terms of Machine Availability clause, from the service provider with reference to maintenance of WTG due to shortcoming in said service is merely an amount to safeguard the loss of appellant. The said amount cannot be called as consideration for the tolerance of service provided and some lacunae thereof nor it makes the appellant the service provider. Infact once the appellant receives compensation for the downfall in service quality, it is because he is not inclined to tolerate the loss as he may suffer on account of said downfall. The concept of ‘Declared Services’ has therefore been wrongly invoked by the Department and the adjudicating authority below. As already discussed above, service recipient cannot be fastened with any liability to pay tax. I also rely upon the decision of Hon’ble Apex Court in the case of Association of Leasing and Financial Service Companies vs. Union of India reported on 2010 (20) STR 417 (SC) wherein it has been held that when no service has been rendered, service tax cannot be levied.
FULL TEXT OF THE CESTAT JUDGEMENT
M/s. Ruchi soya appellant herein has filed impugned appeal to assail the order in appeal No. 380-18-19 dated 19.2.2019. the facts in brief given rise to this appeal are as follows:
2. The appellant has set up a project for generating electricity using wind energy comprising of one Suzlon made Wind Turbine Generators (WTG) having output of 1500 KW electricity. The appellant requested the operator of said WTG M/s. Suzlon Global Services Ltd. (SGSL) to maintain the said WTG. SGSL inter alia is in the business of operating, managing and maintaining wind farm for projects for generation of wind energy by means of WTG. Hence, they accepted the aforesaid request of the appellant vide agreement dated 17.12.2014 so entered between them.
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