2019 (3) TMI 188 - AT - Service Tax

Non-payment of service tax - Maintenance or Repair service - period 16.06.2005 to 31.08.2008 - Held that - Ientical issue is now decided by the Tribunal in the case of Sadhana Electricals & Technical Works MACS Limited 2014 (12) TMI 1136 - CESTAT BANGALORE , where it was held that according to Notification No. 45/2010-ST, dt.20.07.2010, the tax on taxable services relating to transmission and distribution of electricity provided by the service provider to the service receiver which was not being levied shall not be required to be paid in respect of taxable services relating to transmission and distribution of electricity upto 21.06.2010 - In the case in hand, undisputedly, services rendered by appellant are to APTRANSCO. The entire tax liability which has been paid by them, if would have come in contest, the same would have been set aside due to retrospective notification issued by the Govt. of India - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Imposition of penalty under sections 76, 77, and 78 of the Finance Act, 1994.
2. Validity of the Order-in-Revision passed by the Revisionary Authority.
3. Applicability of Notification No. 45/2010-ST for exemption from service tax on services related to distribution of electricity.
4. Interpretation of the Tribunal's findings in the case of Sadhana Electricals & Technical Works MACS Limited.

Analysis:
1. The appeal involved the imposition of penalties under sections 76, 77, and 78 of the Finance Act, 1994, on a cooperative society for non-payment of service tax for the period 16.06.2005 to 31.08.2008. The Adjudicating Authority confirmed the demands raised along with interest and penalties, which were challenged by the appellant. The first appellate authority modified the penalties but upheld the Order-in-Original. The Commissioner, through a Revisionary Authority, ordered the appellant to pay an additional penalty under section 78. The appellant contested the penalties imposed.

2. The appellant argued that the Order-in-Revision was passed after the Order-in-Appeal was pronounced, which merged within the OIA, making the revision unnecessary. The Tribunal cited a similar case where no penalty was imposed when the tax liability would have been set aside. The Revisionary Authority's power under Section 84 of the Finance Act was questioned concerning the timing of the revision order in relation to the Commissioner (Appeals) proceedings.

3. The issue of exemption from service tax under Notification No. 45/2010-ST for services related to the distribution of electricity was crucial. The Tribunal referred to the case of Sadhana Electricals & Technical Works MACS Limited, where it was established that if service tax was not levied during the relevant period, the activity would not be liable for tax. The retrospective notification exempted such services from tax liability, leading to the setting aside of penalties.

4. The Tribunal analyzed the findings in the Sadhana Electricals case and applied the same ratio to the present case. It concluded that the appellant's tax liability, which had been paid, would have been set aside due to the retrospective notification exempting services related to the distribution of electricity. Therefore, the impugned order imposing additional penalties was deemed unsustainable and set aside, allowing the appeal in favor of the appellant.