2017 (1) TMI 1787 - AT - Service Tax

Levy of Service Tax - work of laying Telecom Cables alongside under the roads for Telecom Companies - period October 2006 to November 2010 - HELD THAT - In view of the clarification of CBEC Circular No. 123/5/2010-TRU dated 24.05.2010, in respect of applicability of Service tax on laying of cables under or alongside roads and similar activities, the Board have clarified that the laying of cables under of alongside roads is not a taxable services under any clause of Sub-section 105 of Section 65 of the Finance Act, 1994. The laying of Telecom Cables under or alongside the roads is not a taxable service as clarified by the CBEC vide their Circular dated 24.05.2010 - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Liability of the appellant/assessee for service tax on laying Telecom Cables alongside under roads for Telecom Companies.

Analysis:
The issue in this appeal revolved around the liability of the appellant/assessee for service tax concerning the work of laying Telecom Cables alongside under the roads for Telecom Companies. The appellant had not deposited the due amount of service tax for the period from October 2006 to November 2010, leading to the issuance of a show cause notice demanding service tax of ?1,33,11,717 along with interest and penalties under the Finance Act. The show cause notice was adjudicated ex-parte as the appellant did not respond or appear for the hearing. The demand was confirmed with interest and penalties imposed under various sections of the Finance Act, including a penalty for failure to file returns under the Service Tax Rules.

The appellant, being aggrieved, appealed before the Tribunal, arguing that the CBEC Circular No. 123/5/2010-TRU clarified the non-taxability of laying cables under or alongside roads for Telecom Companies. The appellant contended that as they had only laid cables alongside or under roads without performing any additional installation work, the circular was applicable, and the show cause notice was unjustified. The appellant sought relief based on the circular's clarification and requested the appeal to be allowed with consequential benefits.

Upon considering the arguments presented, the Tribunal concurred that the laying of Telecom Cables under or alongside roads did not constitute a taxable service, as elucidated by the CBEC Circular dated 24.05.2010. Consequently, the appeal was allowed, and the impugned order was set aside. The appellant was deemed entitled to consequential benefits as per the law. The judgment clarified the non-taxable nature of the service in question based on the relevant circular, leading to a favorable outcome for the appellant in this case.