2020 (1) TMI 425 - AT - Service Tax

Exemption to taxable service provided for distribution of electricity - Benefit of N/N. 32/2010-ST dated 22/06/2010 - denial on the ground that the appellant is not a distribution licensee or distribution franchisee or any other person authorized under the Electricity Act for distribution of electricity - HELD THAT - Reliance can be placed in the appellant own case AGARWAL TRADERS VERSUS C.C.E. ST, ROHTAK 2018 (6) TMI 132 - CESTAT CHANDIGARH where it was held that As the appellant is providing services on behalf of the principal, who is having a license as distribution licensee to distribute electricity under the Electricity Act. Therefore, the benefit exemption N/N. 32/2010-ST dated 22/06/2010 cannot be denied to the appellant. Thus, the appellant is entitled to the benefit of N/N. 32/2010-ST dated 22.06.2010 - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Early hearing application based on previous Tribunal decision
- Service tax liability for erection, commissioning, and installation services
- Applicability of Notification No. 32/2010-ST for distribution of electricity
- Entitlement to exemption as an agent providing services on behalf of the principal

Analysis:
1. Early Hearing Application: The appellant filed for early hearing citing a previous Tribunal decision in their favor. The Tribunal granted the application considering the identical issue's prior resolution in favor of the appellant, allowing the appeal for final disposal with mutual consent.

2. Service Tax Liability: The case involved the appellant providing erection, commissioning, and installation services to electricity distribution companies without service tax registration or payment. Show-cause notices were issued, leading to the demand for service tax, interest, and penalties. The adjudication found the services related to electricity distribution, making the appellant liable for service tax post-June 2010.

3. Applicability of Notification No. 32/2010-ST: The denial of exemption under Notification No. 32/2010-ST was based on the appellant not being a distribution licensee. However, the Tribunal analyzed the appellant's role as an agent providing services on behalf of distribution licensees, concluding that the benefit of the notification should not be denied.

4. Entitlement to Exemption as an Agent: Citing precedents and legal principles, the Tribunal held that an agent providing services on behalf of a principal should receive the same exemptions as the principal. Referring to the State Bank of Patiala case, the Tribunal allowed the benefit of the exemption notification to the appellant, as they were acting on behalf of the distribution licensees.

5. Final Decision: Given the settled issue in favor of the appellant based on previous rulings, the Tribunal set aside the impugned order and declared the appellant entitled to the benefit of Notification No. 32/2010-ST dated 22.06.2010. Consequently, the appeal was allowed with any consequential relief required, bringing the case to a favorable conclusion for the appellant.