UTILITY POWERTECH LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) BOTH stay petitions are being disposed of by common order as the issue involved is the same. In one case, service tax of Rs. 19,376/ - and in other case service tax of Rs. 2,69,147/ - stands confirmed by the lower authorities along with imposition of penalty of identical amount on the ground that the appellant has provided business auxiliary services during the relevant period. After hearing both sides duly represented by Ms. Sukriti Das, learned Advocate appearing for the appellant and Shri R.K. Gupta, learned SDR appearing for the Revenue, we find that the appellant is a holder of service tax registration. They were providing services to M/s. Singrauli Super Thermal Power Station in respect of chemical treatment and other related services. It is also seen that the appellant undertook water processing on behalf of their client by adopting method of chemical treatment. The said chemical treated processed water was used by their customer, who is thermal power station for the purpose of generation of steam used in making electricity.

(2.) ON the other hand, it is the contention of the Revenue that the chemical treatment of water does not result in different marketable commodity. As such, it cannot be held to be manufacturing activity. Accordingly, by holding the same as processing activity, the demand stands confirmed. At this prima facie stage, we do not agree with learned Advocate that the processing of water amounts to manufacture inasmuch as the said activity resulted in generation of processed water, which cannot be held to be different commodity than the input, which is again water. At this stage, we find that the Revenue's contention that appellant have provided services to their client by processing of water has force and the appellants are required to be put to some terms of deposit. We accordingly, direct the applicant/appellant to deposit 50% of the duty involved within a period of six weeks from today, subject to which pre -deposit of balance amount of duty and the entire amount of penalty shall stand waived and its recovery stayed during pendency of the appeal. The matter to come up for ascertaining compliance on 2 -3 -2012.