2011 (4) TMI 1188 - AT - Service Tax

Erection, Commissioning or Installation Services and Technical Inspection and Certificate Services - Assessee is a power supply company and to realize power consumption charges, they install meters at the place of consumption - As a measure of safety, the meters undergo testing and retesting - Held that - It is a public sector company set up for supply of electricity following safety measures - Testing fees is realized while primary object of supply of power was fulfilled - The fees so realized does not convince to say that the respondent is an agency engaged in providing taxable service of erection, installation or commissioning or testing service as a testing agency - Therefore, unable to agree with the DR that the order of adjudication in these matters is to be reversed - Revenue therefore, fails for which its appeal is dismissed - Decided in favour of assessee.

Summary

Issues:
1. Need for COD clearance post Electronics Corporation of India Vs UOI judgment
2. Taxability of figures under 'Other Income' in Balance sheet for service tax levy
3. Appeal by Revenue against no service tax on certain activities

Analysis:
1. The judgment addresses the need for COD clearance following the Electronics Corporation of India Vs UOI judgment, stating that such clearance is no longer required. Appeals were taken up for disposal accordingly.

2. The issue of taxability of figures under 'Other Income' in the Balance sheet for service tax levy was extensively discussed. The appellant argued that the figures did not contain any element of taxable service, citing profit on sale of stores, plant and machinery, vehicles, and recovery of transport facilities as the components. The General Manager (Finance) certified the details of these realizations, emphasizing the absence of any taxable element. The Tribunal agreed, setting aside the demand for service tax as the receipts were not of a taxable service nature.

3. The Revenue appealed against the adjudication holding no service tax on 'Erection, Commissioning or Installation Services' and 'Technical Inspection and Certificate Services.' The Revenue contended that these activities were taxable, but the appellant argued that they were incidental to the main activity of supplying power and complied with regulatory measures. The Tribunal examined the activities and found that the appellant was primarily engaged in supplying power, with activities such as meter installation and testing being statutory obligations rather than taxable services. The Tribunal dismissed the Revenue's appeal, stating that the activities were part of the main power supply activity and not subject to tax liability.

Conclusion:
The Tribunal disposed of all matters, setting aside the demand for service tax on 'Other Income' receipts and dismissing the Revenue's appeal against the non-taxability of certain activities related to power supply. The cross objection filed by the Power supply company against the Revenue's appeal was also dismissed.