2015 (10) TMI 2001 - AT - Service Tax

Liability of service tax Commercial or Construction Services Appellant contends that activity undertaken of laying optical fibre cables is not taxable as per circular no. 123/5/2010-TRU dated 24/05/2010 while Revenue contends that same is taxable Held That - Revenue tried to differentiate the case law on ground that appellant herein had undertaken the activity of laying of optical fibers cables but missed out the point that they are also used by Telecommunications Service Providers Demand of tax fails and impugned order liable to be set aside Decided in favour of Assessee.

Summary

Issues Involved:
Service tax liability under Commercial or Industrial Construction Services for laying Optical Fiber Cables.

Analysis:
The appeal was filed against Order-in-Original No. 17/ST/2011-12/C dated 28/10/2011. The issue revolved around the service tax liability of the appellant concerning the laying of Optical Fiber Cables for telecom service providers. The Revenue claimed the activity was taxable, while the appellant cited CBEC circular no. 123/5/2010-TRU dated 24/05/2010, stating that laying cables alongside or under roads is not a taxable service under the Finance Act 1994. The Tribunal found the circular applicable and criticized the adjudicating authority for not following it. The appellant's activities were limited to laying cables alongside or under roads for telecom service providers, similar to cases where the Tribunal ruled in favor of the appellants.

The Tribunal referenced a case involving trenching and laying underground telephone cables, where the appellant did not pay service tax, claiming the activities were not taxable services. The Revenue argued that the activities fell under Erection, Commissioning, or Installation services, making them liable for service tax. The Tribunal noted the appellant's reliance on the CBEC circular and a High Court judgment supporting their position. Despite the Revenue's attempts to distinguish cases, the Tribunal found a prima facie case for the appellant based on the circular and legal decisions, leading to the appeal's allowance without requiring further deposits.

The Tribunal compared the issues in the present case to a previous case involving similar activities, emphasizing that the nature of the cables used by the appellant did not alter the core issue. The departmental representative mentioned the appellant's deposit of a substantial amount, which the appellant agreed not to seek a refund for. Consequently, the Tribunal held that apart from the deposited amount, the service tax demand failed, setting aside the impugned order and allowing the appeal.