TMI Blog2019 (1) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... nt would amount to management of immovable property or otherwise, has been analyzed and discussed by this Bench in the case of Shapoorji Pallonji Infrastructure [2017 (6) TMI 225 - CESTAT CHENNAI] and held in favor of assessee. It was held in the case that management of immovable property does not include operation activities. In addition, it cannot be said that the appellants are doing management service for the reason that the management service is done by appellants to themselves and not to any other person. The appellants are operating the power plant to generate electricity on behalf of the owner for supplying the same to TNEB. Impugned order do not sustain - appeal allowed - decided in favor of appellant. - Application No.ST/Misc/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Management, Maintenance or Repair of Power Plants and above charges are liable to service tax w.e.f. 16.06.2005 under MMRS under the category of Management, Maintenance of Immovable Property. Accordingly, a show cause notice dt. 24.03.2008 was issued to appellants inter alia, proposing service tax demand of ₹ 33,50,510/- along with interest as also imposition of penalty under Section 76 of the Finance Act, 1994. In adjudication, adjudicating authority vide an order dt. 30.07.2008 confirmed the proposed demand of service tax with interest and imposed penalty under Section 76 ibid. On appeal, Commissioner (Appeals) vide impugned order dt. 25.09.2012 modified the order of original authority to the extent of upholding the demand with inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to manufacture of goods within the meaning of Section 2(f) of the Central Excise Act, 1944. That electricity is mentioned under Chapter Heading 27.16 of the First Schedule to the Central Excise Tariff Act, 1985, with effect from 1-3-2005 and electricity being an excisable product, though with nil rate of duty. We have to say that this argument of the appellant is not without substance. The major activity in the power plant is production of electricity which is an excisable product. Further, activity of production of electricity cannot be equated with management of immovable property. In a situation where the property is entrusted for management, the dominant intention would be to manage the property to raise profits whereas in the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ai). Paragraphs 30 and 31 are reproduced as follows :- 30. In the impugned order the Commissioner had rendered a finding that the facility was run by entering into contracts with different organizations such as CMS who had contracted to undertake the operation and maintenance of the facility. He found that though CMS was operating the facility for generating electricity, the entire activity was carried on by CMS on behalf of ST-CMS. The Commissioner also observed : the agreement also provides for incentive payments/liquidated damages/environmental fines...... This does not happen when any agency provides service to another. A service provider is not responsible to achieve any performance target referring to which it becomes entitled t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e terms of the contract vest complete freedom and responsibility on the appellant, without any interference by the owner. The owner s right is restricted to entry and access, to be satisfied that the operation is carried out according to standards. He also receives reports about the relevant aspects of operation, status and output. The payment for operation and maintenance are determined under the various clauses of the contract. In addition to the lump sum payment, it also provides for bonus and penalty. The terms of the contract do not envisage or involve providing any consulting or engineering help to the owner. The operator is fully autonomous and responsible for the performance of operation and maintenance. Whatever engineering issues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e plant was taken over by the appellant for operation. Therefore, the same does not fall under Management, Maintenance or Repair Service. As per our above discussion as well as settled legal position on the identical issue as per the above judgments, we are of the view that the impugned order is not sustainable, therefore, the same is set aside. Following the ratio laid down by this Bench in the aforesaid decision, the impugned order to the contrary then cannot sustain and will require to be set aside, which we hereby do. The appeal is allowed with consequential relief, if any, as per law. MA filed by Revenue for change of cause title consequent to the introduction of GST and the resultant change in the jurisdiction, is allowed. (Ope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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