2017 (7) TMI 342 - AT - Service Tax

Erection, Commissioning, Installation service - Commercial construction service - man power supply agency services - N/N. 11/2010-ST dated 27.02.2010 - Held that - N/N. 45/2010 ST dated 20.07.2010 decreed that all taxable services relating to transmission of electricity shall not be levied during the period upto 26.02.2010, and, for the period upto 21.06.2010 for all taxable services relating to distribution of electricity. Thus, after 21.06.2010, any such services provided relating to distribution of electricity would be taxable at applicable rates unless they have been further exempted by any Notification issued in that regard - the exemption provided in earlier N/N. 45/2010-ST dated 20.07.2010 for services provided in relation to distribution of electricity upto 21.06.2010 have been further continued vide N/N. 32/2010-ST dated 22.06.2010. In consequence, the demand of tax liability beyond 21.06.2010, on the appellant, for 2011-12, also cannot sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
Condonation of delay in appeal filing, Tax liability on services provided to power distribution company, Exemption under Notification No.11/2010-ST, Interpretation of relevant notifications.

Condonation of Delay:
The appellant filed a miscellaneous application seeking condonation of a 15-day delay in preferring the appeal, which was satisfied by the Tribunal based on the reasons provided in the application. With the consent of both sides, the appeal itself was taken up for disposal.

Tax Liability on Services Provided to Power Distribution Company:
The case involved the appellant providing taxable services of Erection, Commissioning, Installation, Commercial construction, and man power supply agency services to a power distribution company. The Department issued a show cause notice demanding differential service tax for a specified period, which was confirmed by the original authority. The Commissioner (Appeals) upheld the order, leading the appellants to appeal before the Tribunal.

Exemption under Notification No.11/2010-ST:
During the hearing, the appellant contended that they were entitled to exemption under Notification No.11/2010-ST for services rendered during the financial year 2011-12 in relation to the transmission of electricity. However, the respondent argued that since the power distribution company was not a power transmission company, the exemption would not apply to the appellant.

Interpretation of Relevant Notifications:
The Tribunal analyzed Notification No. 45/2010-ST and Notification No.11/2010-ST, which provided exemptions for services related to the transmission and distribution of electricity. It was observed that the appellant, providing services to a power distribution company, was denied exemption benefits based on the notifications. However, the Tribunal noted the issuance of Notification No. 32/2010-ST, which continued the exemption for services related to the distribution of electricity beyond a specified date. Consequently, the demand of tax liability on the appellant for the relevant period was not sustainable, and the appeal was allowed with consequential benefits as per law.