2014 (11) TMI 37 - AT - Service Tax

Activity of construction of sub-stations and re-conductering works and sub-contract work undertaken for APEPDCL - Exemption under Notification No. 45/2010, dated 20-7-2010 - Erection, Commissioning and Installation Service and Works Contract Service - Held that - Notification exempts all taxable services rendered in relation to transmission and distribution and in our opinion all services rendered are in relation to transmission and distribution and therefore appellant had made a prima facie case in respect of these items. The appellants have also claimed that they are not liable to pay Service Tax on the work undertaken for CPWD and for this purpose they are relying upon the Circular issued by the Board No. 80/10/2004-S.T., dated 17-9-2004. We find that prima facie this claim is also admissible. If these exemptions and exclusions are allowed, the amount paid by the appellant is more than the amount which is due to be paid by them. It is also noticed that Service Tax has been paid in 2007-08 onwards and in our opinion the amount deposited by the appellant is sufficient for hearing the appeal. - Stay granted.

Summary

Issues:
Classification of services under Erection, Commissioning, and Installation Service and Works Contract Service; Non-payment of Service Tax due to financial crises; Exemption claim for construction of sub-stations, re-conductering works, and sub-contract work for APEPDCL; Claim of exemption for work undertaken for CPWD based on Circular No. 80/10/2004-S.T.; Sufficiency of amount paid by the appellant; Requirement of pre-deposit and stay against recovery during appeal.

Analysis:

The judgment by the Appellate Tribunal CESTAT Bangalore involved several key issues. Firstly, the appellant, engaged in providing services to a specific company, claimed that their services fell under Erection, Commissioning, and Installation Service and Works Contract Service categories. They argued that due to financial crises, they were unable to pay the Service Tax, as their customers also did not remit the tax to them. The appellant contended that they had disclosed all relevant information in their Balance Sheets for the respective financial years.

Regarding the exemption claim, the appellant asserted that they should not be liable to pay Service Tax for the construction of sub-stations, re-conductering works, and sub-contract work undertaken for the company, as these services had received retrospective exemption in their entirety. The Commissioner, in the impugned order, opined that these services were secondary and thus not eligible for exemption under a specific Notification. However, the Tribunal disagreed, noting that the Notification exempted all taxable services related to transmission and distribution, which encompassed the services provided by the appellant. Therefore, the Tribunal found that the appellant had made a prima facie case for exemption concerning these items.

Furthermore, the appellant claimed exemption from paying Service Tax for the work undertaken for CPWD, citing Circular No. 80/10/2004-S.T. The Tribunal considered this claim as prima facie admissible, indicating that if these exemptions and exclusions were granted, the amount already paid by the appellant exceeded the amount due. Additionally, the Tribunal observed that the Service Tax had been paid from 2007-08 onwards, and the deposited amount was deemed sufficient for the appeal proceedings. Consequently, the Tribunal waived the requirement of pre-deposit and granted a stay against recovery during the appeal process.

In conclusion, the judgment addressed various issues related to the classification of services, exemption claims, payment of Service Tax, and the procedural aspects of pre-deposit and stay against recovery, providing a comprehensive analysis and ruling on each matter.