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TMI Blog2024 (8) TMI 1102X X X X Extracts X X X X X X X X Extracts X X X X ..... peline infrastructure for transportation and sale of natural gas in the State of Assam. 2. A Show Cause Notice dated 30.09.2014 was issued to the appellant demanding Service Tax of Rs.27,34,108/- (including Cess) on the taxable services viz. 'transportation of goods through pipeline/conduit service' and 'works contract service', which were not paid by the appellant for the period from 01.04.2013 to 31.03.2014. 2.1. The Notice was adjudicated by the Ld. Additional Commissioner vide the Order-in-Original No. 09/Addl.Commr/ADJ/BT/ST/COMMR/DIB/15-16 dtd. 30.04.2015 wherein he confirmed the demand of Service Tax as proposed in the Notice, along with interest and imposed equal amount of tax as penalty under Section 78 of the Finance Act, 1994. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract. The appellant also submits that the issue is already settled by this Tribunal in the appellant's own case videFinal Order Nos. 76345-76346 of 2024 dated 25.06.2024 in Service Tax Appeal No. 75043 of 2014 & anr. (CESTAT, Kolkata). 4.2. Regarding the demand of Service Tax of Rs.9,60,289/- against the cost of gas meter and pipeline installation, the appellant submitted that the amount is collected as Security Deposit in terms of Section 14 of the PNGRB Act, 2006; furthermore, such amount is refundable at the time of surrender of the connection and hence, such amount is not consideration for provision of any taxable service and not liable to Service Tax. It is submitted that the issue is already settled by this Bench of the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that this advance is nothing, but a three months security deposit to secure payment and is taken in terms of Clause 12.3 of the contract entered into with their customers. For ready reference the said clause is extracted hereunder:- "12.3 The CONSUMER shall have to deposit an amount of Rs.6,65,000.00 (Rupees Six Lakh Sixty five thousand only) which is approximately equivalent to Gas & T.C. Bills of those 3(three) months for which maximum quantity of gas is booked, as an advance with the COMPANY and this will be retained by the COMPANY till the date of expiry of the Agreement. The above amount is calculated as per the gas price & T.C. shown in clause 11.00, 11.02 & 11.03. The above deposit will have to be paid in the form of Bank Draft dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f law that such interest bearing deposit cannot be considered as part of service and leviable to service tax. We are of the view that any interest accrued (or notional) on such sums by way of a security advance, cannot form part of the value of a taxable service rendered. The of the Hon'ble Apex Court in the case of MORIROKU UT INDIA (P) LTD. vs. State of U.P. [2008 (224) E.L.T. 365 (SC)], is squarely to this legal proposition. Moreover, such amount of interest as accrued on security deposits cannot be considered as part of a taxable service, towards consideration received by the appellant without establishing as to how the said security deposit is includible in the amount of consideration charged for the taxable value. Since it is a return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eter and pipeline installation, we observe that the amount is collected as 'security deposit' in terms of Section 14 of the PNGRB Act, 2006. Further, this amount is refundable at the time of surrender of the connection. Hence, we hold that no taxable service is rendered and the amount is not liable to Service Tax. This view has also been held in the appellant's own case in Final Order dated 25.06.2024 (supra). The relevant part of the said order is reproduced below: - "(f) Amt. against cost of Meter and Installation Charges received from Domestic Consumers. 8. An amount of Rs.22,63,502/- has been made out and confirmed by the adjudicating authority. However, we note that the said amount is required to be collected by way of a se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not a provision of service. Therefore we are of the view that such charges account for provision of service whether by way of initial connection or re-connection or any other name assigned. The appellant is liable to pay Service Tax of Rs.18,491/- thereon and the same is confirmed." 7.6. Thus, by relying on the decision cited above, we hold that the appellant is liable to pay service tax along with interest on the reconnection charges received by them. However, there is no suppression of fact with intention to evade the payment of tax exist in this case and hence, no penalty is imposed on this demand. 8. In view of the above, we pass the following order: - (i) We set aside the demand of Rs. Rs.14,67,083/- confirmed on the advance recei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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