The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), New Delhi Bench quashed demand of Rupees one crore as no service tax can be demanded on amount received as facility charges attributable to electricity expenses.
The appellant, M/s. Naidunia Media Pvt Ltd are publishers and printers of newspapers and are registered with the Service Tax Department for providing taxable service of renting of immovable property.
Regarding facility charges received by the appellant, it has been urged that the total amount received Rs.1,73,50,000 during the period 2008-2009 to 2011-2012 as per Profit and Loss Account, is basically sharing of electricity charges or reimbursement of proportional electricity expenses to the appellant as electric supply meter is in the name of this appellant.
On the basis of the sub-meter, the electricity bill is bifurcated between the various entities under the same management. Thus, there is no element of service involved. Electricity is goods chargeable to central excise under CETA. The appellant has also urged that extended period of limitation is not invokable, as all transactions are properly recorded in the books of accounts maintained in the normal course of business.
The appellant submitted that there is no dispute about the fact that the appellant has shared the electricity received from MPEB with Web Dunia, PPPL and others (sister concerns) on proportionate (reimbursement) basis. Admittedly, the appellant has not generated electricity. Further, electricity is goods and not a service. Thus, the same is outside the scope of service tax.
A Coram consisting of Anil Choudhary, Judicial Member observed that “Having considered the rival contentions, I hold that the appellant is not liable to service tax on the amount received as facility charges amounting to Rs.1,73,50,000 as the same is wholly attributable to electricity expenses, which has been shared proportionately by the appellant and its sister concerns.”
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