2016 (7) TMI 1351 - AT - Service Tax

Erection, Commissioning or Installation Services - assessee case is that in view of N/N. 45/2010-S.T., dated 20-7-2010, all taxable services relating to transmission and distribution of electricity provided by any service provider would not be taxable for the periods up to 26-2-2010 and up to 21-6-2010 respectively for services relating to transmission and distribution of electricity - Held that - issue at hand has been considered in the case of M/s West Bengal State Electricity Transmission Company Ltd And Others Versus Commissioner of Service Tax, Kolkata And Others 2015 (5) TMI 108 - CESTAT KOLKATA , where it was held that no service tax is required to be paid for rendering services in relation to transmission and distribution of electricity during the period mentioned in the said Notification - appeal dismissed - decided against Revenue.

Issues:
1. Whether the services provided by the respondent are taxable under the category of "Erection, Commissioning or Installation Services"?
2. Interpretation of Circular No. 123/5/2010-TRU, dated 24-5-2010.
3. Applicability of Notification No. 45/2010-S.T., dated 20-7-2010 to services related to transmission and distribution of electricity.
4. Pre-deposit requirement for hearing an appeal.

Analysis:
1. The case involved the respondent-assessee executing contracts for a power distribution corporation, providing services like erection of lines and transformers. The department issued show cause notices for non-payment of service tax, which were dropped based on a circular. The appellant department argued that the services are taxable under Circular No. 123/5/2010-TRU. The respondent cited Notification No. 45/2010-S.T., exempting taxable services related to transmission and distribution of electricity. The Tribunal referred to various judgments favoring service providers in similar cases and ruled in favor of the respondent, setting aside the demand for service tax.

2. The Tribunal considered the interpretation of Circular No. 123/5/2010-TRU and Notification No. 45/2010-S.T. The appellant contended that the services provided were taxable based on the circular, while the respondent relied on the notification to claim exemption. After examining the facts and legal provisions, the Tribunal found in favor of the respondent, stating that the demand for service tax was unsustainable under the given circumstances.

3. The issue of the applicability of Notification No. 45/2010-S.T. to services related to transmission and distribution of electricity was crucial. The respondent argued that the notification exempted such services from taxation, a point conceded by the appellant. The Tribunal reviewed relevant judgments and found that the exemption applied, leading to the dismissal of the appeal filed by the department due to the unsustainable demand for service tax.

4. The Tribunal also addressed the pre-deposit requirement for hearing an appeal. Referring to previous judgments, the Tribunal ruled that the demand raised was unsustainable under the relevant notifications and circulars, thus dismissing the appeal by the department. The Tribunal emphasized the need to follow the precedents set in similar cases, leading to the decision to set aside the demand for service tax under the category of "Erection, Commissioning or Installation Services."

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