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2023 (9) TMI 923 - AT - Service TaxClassification of services - Works Contract Services - Erection, Commissioning or Installation Services - case of revenue is that the electrical installation works undertaken by the appellant during the disputed period is to be classified under the Works Contract Services and under the Erection, Commissioning or Installation Services - time limitation - HELD THAT - From the definition of Works contract, it is found that only erection, commissioning or installation of electrical and electronic devices are covered under the above entry whereas appellant are engaged in works of electrical light fittings, laying of cables, earthing works, fitting of poles, electric wiring, etc. In the present matter revenue nowhere provided any invoices or any documents by which it can be concluded that the appellant are engaged in erection, commissioning or installation of electrical and electronic devices. Therefore the Service tax demand in the present matter is not sustainable under works contract service on appellant's activity. The Tribunal in the case of COMMISSIONER OF CE CUSTOMS, NASHIK VERSUS S.Z. DHANWATE ENGG. WORKS 2016 (1) TMI 676 - CESTAT MUMBAI , where it was held that The words used in the Notification are for the services relating to transmission and distribution of electricity and undisputed facts are that NTPS Nashik are engaged in power generation and supply of electricity . The supply of electricity cannot take place except by way of transmission and distribution. Time Limitation - HELD THAT - In the facts of the present case that firstly the issue involved is of pure interpretation of legal provisions and classification of services therefore, it cannot be said that the Appellant had any mala fide intentions and have suppressed any fact with intention to evade payment of service tax. It is also on record that the Appellant have represented the matter before department during the investigation of case. This clearly shows that there is no suppression or willful misstatement on the part of the Appellant. The Appellant in the present matter has also provided all the details/documents/records related to the disputed activity before department. In this circumstances charge of suppression or willful misstatement do not survive against the Appellant. Thus extended period of limitation is not invokable in the present matter - The show cause notice was issued on 19.10.2012 for the period covered 2007-08 to 2011-12, which is clearly beyond the normal period of limitation. Therefore, demand is time barred and, therefore, cannot sustain. Penalties - HELD THAT - The penalties imposed upon the appellant also cannot be upheld. The impugned order is required to be set aside - Appeal allowed.
Issues Involved:
1. Classification of Services 2. Taxability under "Erection, Commissioning or Installation Services" 3. Taxability under "Works Contract Services" 4. Applicability of Board Circulars 5. Retrospective Exemption for Transmission and Distribution of Electricity 6. Invocation of Extended Period of Limitation 7. Imposition of Penalties Summary: 1. Classification of Services: The appellant, a contractor for Gujarat State Police Housing Corporation Ltd. (GSPHCL), provided services including installation of electric lighting systems and D.G. Sets. The core issue was whether these services should be classified under "Erection, Commissioning or Installation Services" up to 31.05.2007 and "Works Contract Services" from 01.06.2007 onwards, or under "Maintenance or Repair Service" as claimed by the appellant. 2. Taxability under "Erection, Commissioning or Installation Services": The adjudicating authority confirmed the service tax demand of Rs. 26,117/- under "Erection, Commissioning or Installation Services" for the period prior to 01.06.2007. The Tribunal, however, found that the appellant's activities, such as laying of wires and fittings in residential premises, were not covered under the taxable service definition based on Board Circular No. 62/11/2003-S.T., dated 21-8-2003. 3. Taxability under "Works Contract Services": For the period post 01.06.2007, the adjudicating authority confirmed a service tax demand of Rs. 55,94,435/- under "Works Contract Services". The Tribunal concluded that the appellant's activities, which included electrical light fittings, laying of cables, and fitting of poles, did not fall under the definition of "Works Contract Services" as they did not involve the erection, commissioning, or installation of electrical and electronic devices. 4. Applicability of Board Circulars: The Tribunal relied on Board Circular No. 123/5/2010-TRU, dated 24.05.2010, which clarified that laying of electric cables is not taxable under erection, commissioning, and installation services. The appellant's activities, such as electrification works and laying cables under or alongside roads, were exempted under this circular. 5. Retrospective Exemption for Transmission and Distribution of Electricity: The Tribunal noted that the appellant's activities related to the transmission and distribution of electricity, which were retrospectively exempted as per Notification No. 45/2010-S.T., dated 20-7-2010. This exemption applied to services provided for the period up to 26th February 2010 for transmission and up to 21st June 2010 for distribution of electricity. 6. Invocation of Extended Period of Limitation: The Tribunal found that the issue was interpretational, and there was no suppression or willful misstatement by the appellant. The appellant had provided all necessary documents and records to the department. Therefore, the extended period of limitation was not invokable, and the demand was time-barred. 7. Imposition of Penalties: The Tribunal held that there was no intent to evade tax, as the appellant had classified its services under "Maintenance or Repair Service" and paid applicable VAT on the supply of goods. The penalties imposed were not upheld due to the absence of any fraudulent intent or suppression of facts. Conclusion: The Tribunal set aside the impugned order, allowing the appeal with consequential reliefs in accordance with law. The service tax demands were deemed unsustainable, and the penalties were not upheld. The judgment was pronounced in open court on 12.09.2023.
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