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Case Law Details

Case Name : Operational Energy Group India Pvt. Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)
Appeal Number : Service Tax Appeal Nos. 443 to 445 of 2012
Date of Judgement/Order : 14/02/2023
Related Assessment Year :

Operational Energy Group India Pvt. Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)

Issue whether service tax is required to be discharged on operational charges by the appellant has already been examined and decided in favour of the appellant by this Bench in the appellant’s own case vide Final Order No. 40104/2019 dated 9.1.2019. This Tribunal at para 4 had stated as follows:-

“4. After hearing both sides, we find that the learned Advocate is correct in his assertion. The issue as to whether activity of production of electricity in power plant would amount to management of immovable property or otherwise has been analyzed and discussed by this Bench in the case of Shapoorji Pallonji Infrastructure (supra) and held in favour of assessee…..”

In the facts and circumstances, CESTAT held that assessee is not liable to pay service tax on the operational charges provided by them to the owners of the power plants and (ii) in the light of (i), imposition of penalty does not arise.

No Service Tax on Operational Charges to Owners of Power Plants

FULL TEXT OF THE CESTAT CHENNAI ORDER

These appeals are filed by M/s. Operational Energy Group India Pvt. Ltd. against Order in Original No. 5 to 7/2012 dated 31.1.2012.

2. The facts are that the appellant undertakes to operate and maintain power plants of various clients in terms of the agreements entered with them. As per the agreements, the appellant is receiving maintenance charges and operational charges. Revenue has contended that the appellant is paying service tax only on the maintenance charges and they have not discharged the service tax on the operational charges received from their clients. Hence the issue to be decided is (i) whether the assessee is liable to pay service tax on the operational charges provided by them to the owners of the power plants and (ii) whether penalty is imposable or otherwise.

3. We have heard the learned counsel Shri T.R. Ramesh for the appellant and learned AR Shri R. Rajaraman for the Revenue. We have perused the Appeal, Order in Original and all connected documents. The appellant’s counsel has stated that this issue is already covered in the appellant’s own case for the earlier periods in ST/103/2008 which was allowed by the Tribunal in the case of Shapoorji Pallonji Infrastructure Capital Co. Ltd. Vs. Commissioner of Service Tax, Chennai reported in 2017 (5) GSTL 65 (Tri. Mad.). He further drew attention to the subsequent appeals in their own case which was also decided in their favour vide Final Order No. 40104/2019 dated 9.1.2019. Hence the impugned order is not sustainable in law. The learned AR Shri R. Rajaraman while reiterating the facts given in the Order in Original has also fairly conceded that these are matters covered by the decisions referred to by the appellant’s counsel.

4. We have perused the matter in detail and are of the opinion that the issue whether service tax is required to be discharged on operational charges by the appellant has already been examined and decided in favour of the appellant by this Bench in the appellant’s own case vide Final Order No. 40104/2019 dated 9.1.2019. This Tribunal at para 4 had stated as follows:-

“4. After hearing both sides, we find that the learned Advocate is correct in his assertion. The issue as to whether activity of production of electricity in power plant would amount to management of immovable property or otherwise has been analyzed and discussed by this Bench in the case of Shapoorji Pallonji Infrastructure (supra) and held in favour of assessee…..”

5. In the facts and circumstances, the issues stated at para 2 also are answered as follows:-

(i) The assessee is not liable to pay service tax on the operational charges provided by them to the owners of the power plants and (ii) in the light of (i), imposition of penalty does not arise.

6. Hence the appeals are allowed with consequential relief, if any, as per law.

(Operative portion of the order was pronounced in open court)

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