2018 (8) TMI 1011 - AT - Service Tax

Erection, Commissioning and installation service - appellant had failed to obtain the registration soon after the introduction of levy of service tax on the said service & had not paid the service tax during the period from 10/09/2004 to 15/06/2005 - Held that - In the present case, the appellants are only engaged in the erection of transmission lines, transformers, circuit breakers and this service was redefined vide DT dt 16/06/2005 but it still does not include erection of transmission line, transformers, circuit breakers. In the present case, the period of dispute is 10/09/2004 to 15/06/2005 whereas erection, commissioning and installation service is leviable to service tax only after 16/06/2005 and therefore the services rendered by the appellant do not fall in the definition of erection, commissioning and installation and consequently, the appellants are not liable to pay the service tax. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Applicability of service tax on erection, commissioning, and installation services provided by the appellant from 10/09/2004 to 15/06/2005.
- Justifiability of penalties imposed under Sections 76, 77, and 78 of the Finance Act, 1994.

Analysis:
1. Applicability of Service Tax: The appellant, engaged in providing erection, commissioning, and installation services, was alleged to have failed to obtain registration and pay service tax from 10/09/2004 to 15/06/2005. The Commissioner(Appeals) upheld the demand, penalties, and rejected the appeal. The appellant contended that the services provided did not fall under the definition of erection, commissioning, and installation until after 16/06/2005. Citing relevant decisions, the appellant argued that the services rendered were not taxable during the disputed period. The Tribunal noted that the appellant's activities involved the erection of transmission lines, transformers, and circuit breakers, which were not covered under the definition of taxable services until the amendment on 16/06/2005. Relying on the cited decisions, the Tribunal concluded that the appellant was not liable for service tax during the disputed period and allowed the appeal, setting aside the impugned order.

2. Penalties Imposed: The penalties imposed under Sections 76, 77, and 78 of the Finance Act, 1994 were also challenged by the appellant. However, since the Tribunal ruled in favor of the appellant regarding the non-applicability of service tax on the provided services, the penalties imposed were deemed unjustified. The Tribunal's decision to set aside the impugned order encompassed the annulment of these penalties as well, thereby relieving the appellant from the financial burden associated with the penalties.

In conclusion, the Tribunal's detailed analysis focused on the interpretation of the law regarding the applicability of service tax on specific services provided by the appellant during the disputed period. By considering the legislative framework, relevant case laws, and the nature of the appellant's services, the Tribunal ruled in favor of the appellant, absolving them from the liability of paying service tax and overturning the penalties imposed under the Finance Act, 1994.