2026-VIL-146-CESTAT-CHD-ST
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SERVICE TAX CESTAT Cases

Service Tax - Sale of Goods vs. Provision of Support Services - The appellant is a state-owned public utility undertaking that generates electricity using coal and produces fly ash as a by-product - Appellant entered into long-term supply agreements with cement manufacturers to sell the dry fly ash, describing the consideration as 'administrative charges'. Department alleged that the appellant provided 'Support Services of Business or Commerce' to the cement companies by providing infrastructure and services like water, electricity, land, roads, personnel, and security, and demanded service tax - Whether the transaction constituted a sale of goods or the provision of support services – HELD - The transaction between the appellant and the cement companies was a sale of goods, not the provision of support services. The definition of 'sale' under the Sale of Goods Act, Haryana VAT Act, and the Central Excise Act, covers the transfer of possession of goods for consideration. The dominant intention of the contract was the sale of goods, and the incidental or unavoidable use of infrastructure did not convert it into a separate taxable service - 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. 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 - The impugned orders are set aside and the appeal is allowed
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