Ms Bokaro Power Supply Company P Limited Through Sujit Kumar vs. The Union Of INDIA Through The Secretary Ministry Of Finance Deptt Of Revenue

Facts

M/s. Bokaro Power Supply Company (P) Limited (the petitioner) filed a writ petition before the Jharkhand High Court challenging an Order-in-Original dated 22.11.2019 passed by the Principal Commissioner of CGST & Central Excise, Ranchi (the respondent). The petitioner sought to quash this order on grounds of violation of principles of natural justice and to restrain the respondent from levying service tax on the generation of electricity supplied to SAIL-BSL. The petitioner argued that this activity constituted manufacture of 'excisable goods' and was thus excluded from service tax, or alternatively, should not be treated as 'Business Auxiliary Service' or 'service' for specific periods. The respondent raised a preliminary objection regarding the maintainability of the writ petition due to the availability of an alternative appellate remedy.

Held

The Court did not decide the substantive issues raised by the petitioner. Instead, after some arguments, the learned counsel for the petitioner sought permission to withdraw the writ application to avail of the alternative remedy of appeal before the CESTAT under Section 86 of the Finance Act, 1994. The respondent department also raised a preliminary objection to the maintainability of the writ petition in light of the alternative appellate remedy. Consequently, the Court dismissed the writ petition as withdrawn. The petitioner was granted liberty to prefer an appeal against the impugned Order-in-Original dated 22.11.2019, as permissible in law. No specific findings were made on the merits of the case, and the issues regarding natural justice, classification of electricity generation as excisable goods versus service, and the applicability of service tax for the specified periods were left undecided by the High Court.

Key Issues

1. Whether the Order-in-Original dated 22.11.2019, passed by the Principal Commissioner of CGST & Central Excise, Ranchi, is liable to be quashed for violating the principles of natural justice? The petitioner contended that the order was passed in violation of natural justice. The respondent's argument on this point is not recorded. 2. Whether the generation of electricity by the petitioner for supply to SAIL-BSL amounts to manufacture of 'excisable goods' and is therefore excluded from the levy of service tax? The petitioner argued that the activity is manufacture of excisable goods, not a service. The respondent's argument on this point is not recorded. 3. Whether the respondent is restrained from levying service tax on the generation of electricity by treating it as ‘Business Auxiliary Service’ up to 30.06.2012 and as ‘service’ from 01.07.2012 to 31.03.2016? The petitioner sought to restrain the levy of service tax on these grounds. The respondent's argument on this point is not recorded.