2023 (5) TMI 10 - AT - Service Tax

Refund of excess service tax paid - rejection of the refund application on the ground that the services provided to M/s CIDCO as per the work order dated 01.04.2009 related to erection, commissioning and installation services and as such, the service tax liability has been appropriately discharged and since no excess payment of tax has been made, they are not entitled for the benefit of refund - N/N. 45/2010-ST dated 20.07.2010 - HELD THAT - On careful examination of the agreement dated 01.08.2003 entered into between M/s MSEB and M/s CIDCO read with the work order dated 01.04.2009 issued to the appellant by M/s CIDCO, it is found that the assigned work executed by the appellant were in context with installation and commissioning of the sub-station for and on behalf of the MSEB. The Central Government under Notification No. 45/2010-ST dated 20.07.2010 has exempted payment of service tax on taxable services relating to transmission and distribution of electricity. Since, the appellants in the present case, have provided the activities for installation of the power generation station, ultimately made for distribution of electricity, in our considered view, the benefit provided under the Notification No. 45/2010-ST dated 20.07.2010 should appropriately be available to them. There are no merits in the impugned order, insofar as it has confirmed the service tax demand of Rs. 39,10,853/- on the appellant. Hence, the appeal filed by the appellants to such extent is allowed, with the direction to grant consequential refund, upon fulfilment of the conditions that the incidence of service tax has not been passed on to any other person and same has been borne by the appellant themselves. For the limited purpose of ascertaining the arithmetical accuracy of the refund claim amounting to Rs. 17,02,362/-, the matter is remanded to the original authority for passing of the de novo adjudication order - Appeal allowed by way of remand.

Summary

Issues Involved:
The judgment involves the issue of eligibility for refund of excess service tax paid by the appellants to the government exchequer, specifically in relation to services provided to M/s CIDCO which were initially categorized under works contract service but later found to be exempted from service tax under Notification No. 45/2010-ST dated 20.07.2010.

Summary:

Issue 1: Eligibility for Refund under Notification No. 45/2010-ST

The appellants, engaged in providing electrical engineering services, had paid service tax under works contract service for activities related to erection, testing, and commissioning of transformers for M/s CIDCO. Subsequently, they sought a refund upon realizing the exemption under Notification No. 45/2010-ST. The department rejected the refund claim, asserting that the services provided were not solely for laying cables but involved erection jobs and equipment installation. The Commissioner (Appeals) upheld the rejection, stating the services were not connected to transmission and distribution of electricity. The Tribunal, after examining the agreements and work orders, concluded that the activities undertaken by the appellants were indeed related to transmission and distribution of electricity. Therefore, the benefit of the notification should be available to them, and the service tax demand was set aside, allowing the refund.

Issue 2: Arithmetical Accuracy of Refund Claim

The Tribunal directed the original authority to reexamine the refund claim amounting to Rs. 17,02,362 to determine if it was paid in excess by the appellants. The matter was remanded for a fresh adjudication order, emphasizing the need for the original authority to consider all relevant documents submitted by the appellants. The appellants were granted a personal hearing before a decision on the refund amount was made.

Conclusion:
The Tribunal allowed the appeal, directing the grant of consequential refund for the service tax demand and remanding the matter regarding the arithmetical accuracy of the refund claim for further adjudication by the original authority with an opportunity for the appellants to present their case.