TMI Blog2023 (10) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... MRS, however, mere supply of water and electricity cannot become in itself MMRS in the facts of the case, when the entire agreement is seen in totality. There is also force in the argument by the Appellant that Department has mainly relied on Notification No. 31/2010-ST dated 22.06.2010, which, inter alia, provided for exemption of services relating to supply of water and electricity, in support that prior to this, the same was liable to service tax - if the Government felt that supply of water and supply of electricity were not chargeable to service tax, either under some exemption or interpretation, they have continued to give that exemption by virtue of Notification No. 31/2010-ST. There is another aspect of Notification No. 12/2003 dated 20.06.2003, which provided for exemption to the extent of value of goods and materials sold by the service provider to the recipients of service subject to certain conditions. Therefore, under this notification also, even if the entire contract is to be treated as MMRS, the value of goods sold would have to be excluded, meaning, there won t be any service tax liability to that extent - supply of water and electricity is essentially a sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts towards supply of electricity and water for the period October, 2008 to June, 2010 from the said concessionaires in addition to consideration for providing such space as per the terms of the agreement with them against the right to use the space in the Airport. 4. The Government had issued Notification No.31/2010-ST dt.22.06.2010 in exercise of powers under Sec 93(1) of the Finance Act providing exemption of various services provided within the Port or an Airport, inter alia, including supply of water and supply of electricity. 5. Thereafter, in the course of audit of the accounts of the Appellant, it appeared to Revenue that Appellant have recovered towards reimbursement of electricity and water charges, with an addition of 10% to actual expenses, incurred, from the tenants/licensees, located within the premises of the Airport. It appeared to Revenue that the amount recovered under these two heads fall under taxable category of Management, Maintenance Repair service under Sec 65(64) of the Finance Act prior to 01.07.2010. Further, as the exemption was granted w.e.f. the said date vide aforementioned Notification No.31/2010- ST, it appeared that Appellant was liable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided for exemption from the levy of service tax on various services provided in the Port or Airport, inter alia, including supply of water and supply of electricity. The Revenue prior to the issue of this notification believed that amount collected by the Appellants for these two activities, which are in the nature of sale of goods, was not liable to service tax. Thus, the Impugned Order is fit to be set aside for invocation of extended period of limitation, itself. 9. Learned Counsel also relies on the ruling of Hon ble Delhi High Court in the case of Intercontinental Consultants and Technocrats Pvt Ltd, as the Appellants have acted as a pure agent by collecting the electricity and water charges from their tenants/licensees and have paid the amount to the suppliers of these items. Hence, Appellants cannot be subjected to any service tax and the SCN is wholly misconceived. Reliance is also placed on ruling of Hon ble Supreme Court in the case of State of AP Ors vs National Thermal Power Corporation Ltd Ors [2002 (5) SCC 203 (SC)], wherein, the Constitution Bench held that electricity is goods and is liable to Sales Tax. Water is also a good is not in dispute. 10. For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise [1997 (94) ELT 13 (SC)]. 15. On going through the concessionaire agreement it appears that this is mainly in relation to renting of space/premises within the Airport to independent concessionaire with whom they have different revenue sharing agreement, etc., in lieu of rent. The actual consumption of electricity and water by these concessionaires is part of the same agreement but the same cannot be treated as part of MMRS, in view of the fact that it is an independent activity which they have to provide within the Airport premises, as they have no other option to get the water and electricity from somebody else. The Revenue has tried to classify this as MMRS, however, mere supply of water and electricity cannot become in itself MMRS in the facts of the case, when the entire agreement is seen in totality. 16. There is also force in the argument by the Appellant that Department has mainly relied on Notification No. 31/2010-ST dated 22.06.2010, which, inter alia, provided for exemption of services relating to supply of water and electricity, in support that prior to this, the same was liable to service tax. In order to understand why the supply of water and supply of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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