IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL EASTERN ZONAL BENCH : KOLKATA REGIONAL BENCH – COURT NO. 1 IN Service Tax (Cross) Application No. 76908 of 2019 (Arising out of Order-in-Original No. 01/Commissioner/CGST/Haldia/Adjn/2018 dated 21.02.2018 passed by the Commissioner of Central GST & Central Excise Haldia Commissionerate M. S. Building, Custom House, 15/1, Strand Road, Kolkata

700 001)

M/s. Haldia Petrochemicals Limited : Appellant Bengal Eco Intelligent Park, Tower-1, 3^rd Floor Block-EM, Plot No. 3, Salt Lake City, Sector-V, Kolkata-700091 VERSUS Commissioner of Central Tax, : Respondent Haldia CGST & C. EX.

Commissionerate, Customs House M. S. Building, 15/1, Strand Road, Kolkata 700 001 APPEARANCE:

Shri Arvind Baheti, C. A. for the Appellant Shri D. Sue, Authorized Representative for the Respondent CORAM:

HON’BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)

HON’BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)

FINAL ORDER NO.77029/2025 DATE OF HEARING / DECISION: 22.07.2025 Order: [PER SHRI K. ANPAZHAKAN]

The present appeal has been filed against the impugned Order-in-Original No. 01/Commissioner/CGST/Haldia/Adjn/2018 dated 21.02.2018 passed by the Commissioner of Central GST & Central Excise Haldia Commissionerate M. S. Building, Custom House, 15/1, Strand Road, Kolkata, wherein Service Tax demand of Rs. 6,63,24,448/- has been confirmed along with interest and equivalent penalty has also been imposed. A penalty of Rs. 10,000/- has also been imposed under Section

77 of the Finance Act. 1994.

2. The facts of the case are that M/s HPL Cogeneration Limited (hereinafter referred to as “HPLCL”) was a public limited company constituted under Companies Act, 1956, which was subsequently amalgamated with M/s Haldia Petrochemicals Ltd (hereinafter referred to as “HPL/the Appellant”) w.e.f. 01.04.2008. The Appellant is engaged in manufacture of various petrochemical products mainly falling under the Chapter 27, 29 and 39 of the Central Excise Tariff Act, 1985, at their integrated factory located at Haldia, West Bengal. HPLCL had set up a Combined Cycle Cogeneration Power Plant at the said facility for generating electricity and steam exclusively for use of HPL.

2.1. In terms of the Power Purchase Agreement (‘PPA’) dated 10^th June 1998, HPL was to supply Naphtha and other utilities as free issue to HPLCL, which would be converted by HPLCL to generate electricity/steam in its power plant and supply it to HPL for exclusive use in its manufacturing facility. The payment for the said job work done by HPLCL, termed as “facilitation charges” was payable monthly and net of any taxes.

2.2. Pursuant to an investigation initiated by DGCEI, Kolkata Zonal Unit around September 2005, a Show cause Notice dated 06.11.2006 was issued on HPLCL demanding service tax on the facilitation charges received by it during the relevant period. It is the case of the revenue that HPLCL has generated electricity on behalf of HPL, and the said processing/job work does not amount to 'manufacture' as per Section 2(f) of the Central Excise Act as electricity was not covered under the Central Excise Tariff during the relevant period. Consequently, the Notice proposed to recover service tax amounting Rs. 6,63,24,448/- under Section 73 of the said Act along with interest and penalties under Section 76, 77 and 78. HPLCL duly replied to the Notice vide its letter dated 08.01.2007 and additional submissions dated 05.07.2007, 03.08.2007 and

09.11.2017.

2.3. The said notice was adjudicated by the Commissioner vide vide Order-in-Original No. 01/Commissioner/CGST/Haldia/Adjn/2018 dated 21.02.2018, whereby the demand of service tax as proposed in the Notice was confirmed by the Ld. Commissioner of CGST & CX, Haldia Commissionerate.

2.4. Aggrieved by the impugned Order, the Appellant filed the instant appeal before this Tribunal. Subsequently, the Department filed counter contentions to the Appellant’s appeal under the guise of cross-objections.

3. The appellant submits that the entire