2017 (7) TMI 296 - AT - Service Tax

Erection, Commissioning and Installation charges - services provided in respect of erection of sub stations, erection of transmission lines and in more cases erection of distribution transformers for Andhra Pradesh Southern Power Distribution Company Limited - Held that - N/N. 45/2010, dt. 20.07.2010 unequivocally exempts any taxable services provided by the Service Provider to the service recipient relating to transmission and distribution of electricity. We fail to understand how the adjudicating authority came to the conclusion that this notification is applicable only to the transmission companies and not for the services rendered - reliance placed in the case of M/s Hyderabad Power Installations Pvt. Ltd. Versus CCE, C& ST, Hyderabad-II 2016 (7) TMI 1151 - CESTAT HYDERABAD - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Waiver of pre-deposit of confirmed service tax liability.
2. Applicability of Notification No. 45/2010-ST regarding exemption of service tax on services related to transmission and distribution of electricity.
3. Interpretation of conflicting provisions under Section 11(B) and Section 11(C) of the Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994, concerning the time limit for filing refund claims.

Detailed Analysis:

1. Waiver of Pre-Deposit of Confirmed Service Tax Liability:
The appellant filed a Stay Petition seeking waiver of the pre-deposit of the confirmed service tax liability, along with interest and penalties imposed for the period from October 2004 to May 2007. The service tax liability was confirmed under the category of Erection, Commissioning, and Installation charges for services provided in respect of the erection of substations, transmission lines, and distribution transformers for Andhra Pradesh Southern Power Distribution Company Limited. The Tribunal decided to dispose of the appeal after allowing the application for waiver of the pre-deposit.

2. Applicability of Notification No. 45/2010-ST:
The appellant contended that the services provided were exempt from service tax under Notification No. 45/2010-ST, which exempts taxable services related to the transmission and distribution of electricity. The adjudicating authority had previously rejected this contention, stating that the notification did not apply to services received by transmission and distribution companies from various service providers. The Tribunal, however, found that the notification unequivocally exempts any taxable services provided by the service provider to the service recipient relating to the transmission and distribution of electricity. The Tribunal referred to a similar case, Hyderabad Power Installations (P) Ltd, which supported the appellant's contention and clarified that the exemption applies to the services provided by the appellant.

3. Interpretation of Conflicting Provisions under Section 11(B) and Section 11(C):
The Tribunal addressed the issue of conflicting provisions regarding the time limit for filing refund claims under Section 11(B) and Section 11(C) of the Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994. Section 11(C) provides a six-month time limit for filing refund claims arising from notifications issued under that section, while Section 11(B) allows a one-year period in cases where the refund arises from a judgment, decree, order, or direction of an appellate authority, Tribunal, or court. The Tribunal applied the principle of harmonious construction to reconcile these provisions, concluding that the one-year period under Section 11(B) would take precedence in cases where the issue was sub judice. Consequently, the limitation period for filing the refund claim in this case would start from the date of the final judgment, which was 23.05.2016.

Conclusion:
The Tribunal found the impugned order unsustainable and set it aside, allowing the appeal. The Tribunal concluded that the appellant was entitled to the benefit of Notification No. 45/2010-ST and that the demand raised under Erection, Commissioning, and Installation Services was unsustainable. The Tribunal also clarified the application of the time limit for filing refund claims, determining that the one-year period under Section 11(B) would apply in this case.