Custom, Excise & Service Tax Tribunal
Panipat Thermal Power Station vs Cgst Panchkula on 22 January, 2026
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
REGIONAL BENCH - COURT NO. I
Service Tax Appeal No. 3210 of 2012
[Arising out of Order-in-Original No. 13/ST/Commr/BKJ/RTK/2012 dated
20.07.2012 passed by the Commissioner of Central Excise & Service Tax, Rohtak]
M/s Panipat Thermal Power Station ...Appellant
(A Unit of HPGCL), Village Assan,
Assandh Road, Panipat, Haryana
VERSUS
Commissioner of Central Excise, Goods & ...Respondent
Service Tax, Panchkula GST Bhawan, Sector 25, Panchkula, Haryana WITH Service Tax Appeal No. 56604 of 2013 [Arising out of Order-in-Original No. 25/ST/Commr/DM/RTK/2012 dated 31.12.2012 passed by the Commissioner of Central Excise & Service Tax, Rohtak] M/s Panipat Thermal Power Station ...Appellant (A Unit of HPGCL), Village Assan, Assandh Road, Panipat, Haryana VERSUS Commissioner of Central Excise, Goods & ...Respondent Service Tax, Panchkula GST Bhawan, Sector 25, Panchkula, Haryana APPEARANCE:
Mr. Peyush Pruthi, Advocate with Mr. Sehaj Bansal, CA for the Appellant Mr. Anurag Kumar and Mr. Goverdhan Dass Bansal, Authorized Representatives for the Respondent CORAM: HON'BLE MR. S. S. GARG, MEMBER (JUDICIAL) HON'BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) 2 ST/3210/2012 & ST/56604/2013 FINAL ORDER NO. 60099-60100/2026 DATE OF HEARING: 14.01.2026 DATE OF DECISION: 22.01.2026 S. S. GARG :
These two appeals are directed against two different impugned orders dated 20.07.2012 and 31.12.2012 respectively, passed by the Commissioner of Central Excise & Service Tax, Rohtak, whereby the learned Commissioner has confirmed the demand of service tax on administrative charges. Since the issue involved in both the appeals is identical, therefore, both the appeals are taken up together for the purpose of discussion and decisions. The details of both the appeals are given herein below in a tabular form:
Appeal ST/3210/2012 ST/56604/2013
No.
Period 01.05.2006 to 01.12.2010 to 01.12.2010 to 01.03.2011
30.11.2010 28.02.2011 28.02.2011 to
31.12.2011
SCN No. 05/ST/Commr 09/ST/Commr 06/ST/Commr/DM/RTK/2012
/HQ/RTK/2011 /HQ/RTK/2011 dated 31.12.2012
dated dated
25.08.2011 22.12.2011
Demand Units 5 to 8 Units 1 to 4 Units 1 to 8
from
OIO No. 13/ST/Commr/BKJ/RTK/2012 25/ST/Commr/DM/RTK
dated 20.07.2012 /2012 dated 31.12.2012
Confirmed Rs. 5,72,89,326/- + Equal Penalty Rs. 24,48,712/-
Amount + Penalty of Rs. 10,000/-
2. Briefly stated facts of the present case are that M/s Panipat Thermal Power Station ('the Appellant') is a State-Government owned public utility undertaking in Haryana which generates electricity using 3 ST/3210/2012 & ST/56604/2013 coal, resulting in the production of fly ash as a by-product. The Appellant entered into long-term supply agreements of 15 years with various cement manufacturing companies namely M/s Jay Pee Associates Ltd, M/s Ambuja Shree Cement Ltd and M/s Ultratech Cement Ltd, for the supply of dry fly ash against agreed consideration described as 'administrative charges'.
2.1 Acting on intelligence that the Appellant is collecting payment in the name of 'administrative charges' from their customers who are lifting dry ash from Appellant's premises under the agreements, the department sought the information from the Appellant on 03.08.2009 and onwards. The required information was submitted to the department on 09.08.2010. Thereafter, show cause notices were issued to the Appellant, as mentioned in the above table, alleging that the Appellant had provided the Support Services of Business or Commerce to the customers by way of providing the water for sprinkling, the electricity for lighting, the maintenance and operation of fly ash evacuation system, the land for construction of storage silos and parking of vehicles, the road usage, the personnel for issue of outward movement gate pass and security.
2.2 After following the due process, the learned Commissioner, vide the impugned orders, confirmed the demands and penalties as mentioned in the above table. Aggrieved by the impugned orders, the Appellant has preferred the present appeals before us.
3. Heard both the sides and perused the material on records.
4 ST/3210/2012 & ST/56604/2013
4. The learned Counsel for the Appellant submits that the impugned orders are not sustainable in law and are liable to be set aside as the same have been passed without properly appreciating the facts & law and binding judicial precedents.
4.1 The learned Counsel further submits that the transaction with the cement manufacturing companies constitutes a sale of goods, as the property in dry fly ash is transferred for valuable consideration and such transaction falls squarely within the definition of "sale"
under the Sale of Goods Act, the Haryana VAT Act and Section 2(h) of the Central Excise Act, 1944 (transfer of possession of goods for cash or other consideration). He also submits that any incidental provision of facilities such as electricity, water, land free of cost, does not convert a sale transaction into a service contract. 4.2 The learned Counsel further submits that where the dominant intention of the contract is the sale of goods, incidental or unavoidable use of infrastructure does not give rise to a separate taxable service. He further submits that after 01.03.2011, when excise duty on fly ash became leviable @1%, the Appellant duly paid excise duty on clearances as reflected in ER-1 Returns and therefore, the service tax and the excise duty cannot be simultaneously levied on the same transaction. He also submits that fly ash was exempted from excise duty vide Notification No. 76/86 dated 10.02.1986 and therefore, when the goods are exempted under the Central Excise then service tax cannot be levied on the same transaction under the 5 ST/3210/2012 & ST/56604/2013 guise of Service Tax as it is a well settled law that the service tax and the excise duty cannot be levied simultaneously. 4.3 The learned Counsel further submits that this issue is no more res integra and has been settled by the Tribunal in favour of the assessee in the case of M/s Mettur Thermal Power Station vs. CCE & ST, Salem - 2013 (10) TMI 436 - CESTAT Chennai. He further submits that the said decision was subsequently followed in the following cases:
M/s Mettur Thermal Power Station vs. CCE & ST, Salem - 2014 (12) TMI 594 - CESTAT Chennai Tamil Nadu Generation And Distribution Corporation Ltd vs. Commissioner of CGST & CE, Chennai - 2023 (10) TMI 56 CESTAT Chennai
5. On the other hand, the learned Authorized Representative for the Revenue reiterates the findings of the impugned order and submits that the administrative charges are collected as the income of the Appellant and the Appellant has rendered the service to the cement companies for providing infrastructural support to collect fly ash, therefore, the Appellant is liable to pay the service tax under 'Support Service of Business or Commerce' as defined under Section 65(104c) of the Finance Act, 1994. He further submits that extended period of limitation has rightly been invoked as the Appellant did not get themselves registered under the Service Tax and did not file the periodical ST-3 Returns.
6. We have considered the submissions made by both the parties and perused the material on record and also gone through the decisions relied upon by the Appellant. We find that the only issue 6 ST/3210/2012 & ST/56604/2013 involved in the present case is the whether the Appellant has rendered 'Business Support Services' to cement companies as defined under Section 65(104c) of the Act, by way of providing infrastructure related services such as supply of water for sprinkling, lighting of operational areas, electricity for operation of extraction systems, provision of land for construction of storage silos and parking of vehicles, use and maintenance of internal roads, infrastructure for extraction or collection of dry fly ash, deployment of personnel for gate passes and security.
7. Further, we find that the transaction between the Appellant and the cement companies in fact constitutes a sale as such transaction falls within the definition of "sale" under the Sale of Goods Act, the Haryana VAT Act and Section 2(h) of the Central Excise Act, 1994.
8. Further, we find that the issue involved in the present case is no more res integra and has been settled by the Tribunal in favour of the assessee in the cases cited supra. In this regard, we may refer to the decision of the Tribunal in the case of M/s Mettur Thermal Power Station vs. CCE & ST, Salem - 2013 (10) TMI 436 - CESTAT Chennai, wherein identical issue was involved and Chennai Bench of the Tribunal held that demand of service tax under 'Support Service of Business or Commerce' is not sustainable; the relevant extract of the said decision is reproduced herein below:
"16. In our considered view, the activity of collection and removal of Fly ash as per rate of the order of Government of Tamil Nadu would not constitute "infrastructural support service" under the definition of "Support Service of Business or Commerce". We have noticed that Government of India, Ministry of Environment and Forests issued Notification dated 7 ST/3210/2012 & ST/56604/2013 14-9-1999 to the effect that Fly ash should be supplied free of cost. Subsequently, by Notification dated 6-11-2008, issued by Ministry of Environment and Forest, Thermal Power Stations are permitted to sell Fly ash to the user agencies. It makes it clear that the consideration received by the appellant from the cement and asbestos sheet companies for supply of Fly ash seems to be for sale of fly ash. In our opinion, it is not for any service provided to the persons taking delivery of Fly ash, notwithstanding the name under which, it is collected. Hence, the demand of Service Tax along with interest is not sustainable."
We also find that the said decision of the Tribunal was subsequently followed in the case of Tamil Nadu Generation And Distribution Corporation Limited (supra), wherein also the demand of service tax was set aside.
9. In view of our discussion above and by following the ratio of the above cited decisions, we are of the considered view that the impugned orders are not sustainable in law and are liable to be set aside and we do so by allowing both the appeals of the Appellant with consequential relief, if any, as per law.
(Order pronounced in the open court on 22.01.2026) (S. S. GARG) MEMBER (JUDICIAL) (P. ANJANI KUMAR) MEMBER (TECHNICAL) RA_Saifi