TaxTMI 
TaxTMI 
2024 (9) TMI 1542
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct, 2017, alongwith penalty equivalent to tax imposed against the petitioner. 3) The petitioner has it's registered office in the State of Himachal Pradesh and in the impugned order, the liability qua the power stations run by the petitioner in the State of Himachal Pradesh , which is more than Rs.100 crores is imposed; and the total liability in respect of the power stations run by the petitioner in the other States including the State of Himachal Pradesh imposed is in excess of Rs. 1000 crores. 4) The petitioner is engaged in the activity of power generation and is registered with various States GST Authorities including the State of Himachal Pradesh, vide different GSTINs. It had entered into agreements with various State Governments including the State of Himachal Pradesh, for establishing and running power generation projects in the State. Under such agreements, as compensation towards causing distress to the environment and people involved due to the setting up of the power projects, the petitioner provides 12% of the power generated, free of cost to the State Governments and 1% free power to the Local Area Development Fund. Details of the agreements and the relevant clause....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r allocation of power from Central Sector Generating stations by the Ministry of Power while dealing with the "hydropower plants". 11) We shall now refer to the Service Tax proceedings under the Finance Act, 1994. This is the Annexure P-9 order dt.19.6.2024 passed by the Additional Director General (Adjudication) of the Adjudication cell of the Directorate General of the GST Intelligence. Basing on intelligence developed by the Directorate General of Goods and Service Tax Intelligence, Chandigarh Zonal Unit, the said department had alleged that the petitioner has not paid the service tax under the reverse charge mechanism during the period between April 2016 to June 2017 ( prior to the GST regime which came from 1.7.2017) on the amount of royalty paid to the State Government in the form of free power of 12% in lieu of license provided by the State Governments to the petitioner to use the natural resources. A show cause notice was issued on 05.10.2021 to 13 GSTINs of the petitioner across the country demanding service tax amounting to more than Rs. 72 crores alongwith interest and penalty after invoking the extended period of limitation under Section 73 (1) of Finance Act, 1994. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 13.9.4 .... 13.9.5. From the above discussions, I find that the Noticee/M/s NHPCL have supplied free power @ 12% to respective states in terms of Hydro Power Policy, 2008, Central Electricity Regulatory Commission's Regulations 2014 and letter/Notification dated 1 November, 1990 issued by Government of India, Ministry of Energy, Department of Power under No. 16/46/86-DO(NHPC) (Vol.II) as compensation where distress is caused by setting up the hydro-electric project, therefore the same can not be treated as royalty. Accordingly, I hold that Service Tax demanded in the impugned SCN dated 05.10.2021 on free power @12% supplied to the respective state/home states as compensation for distress caused due to setting up the hydro-electric projects. 1 place reliance on the decision of Hon'ble CESTAT, New Delhi (Principal Bench) in Service Tax Appeal No. 54988 of 2023 in the case South Eastern Coalfields Lvd. Vs. Principal Commissioner, CGST & Central Excise, Indore wherein Hon'ble Tribunal has hold that compensation is not considered as consideration for provision of any service. While delivering this decision, Hon'ble Tribunal also considered the decision of Hon'....
X X X X Extracts X X X X
X X X X Extracts X X X X
....like the erstwhile Central Excise Department, which deals with service tax issues , it is not open to the respondents to take a different stand when it comes to levy of GST. 14) Learned counsel for both the respondents, however, pointed out that this decision Annexure P-9 relating to service tax is being considered by a Committee of Commissioners for the purpose of deciding whether or not to challenge it in appeal. 15) Be that as it may, the situation is akin to a situation where if a decision is taken by a particular Bench of a High Court, such decision is normally binding on all other Coordinate Benches unless an appeal is filed challenging it, and the same decision is reversed and a different view is taken. But till such an event happens, the decision already rendered by a Bench would normally be binding on another Bench of the High Court. Therefore, we prima facie find considerable force in the contention of the counsel for the petitioner in this regard. 16) In the impugned order dt. 14.06.2024 (Annexure P-1) passed by 2nd respondent, admittedly a view was taken by 2nd respondent diametrically opposite to the view taken qua service tax expressed in Annexure P-9 order dt. 19.....