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2023 (12) TMI 1010 - AT - Service TaxCENVAT Credit - erection of transmission line towers - case of the appellant is the transmission towers which it had erected were for transmission of electricity and hence they are fully exempted - levy of penalty - HELD THAT - The question is no longer res integra and it has been the consistent view in several precedent decisions that the expression services relating to transmission of electricity in the two notifications has a wide ambit and includes the services of installation of transmission towers for electricity and no service tax is payable - reliance placed in the case of M/S. KEC INTERNATIONAL LTD. VERSUS COMMISSIONER OF CGST, GURGAON AND COMMISSIONER OF S.T., DELHI 2022 (8) TMI 992 - CESTAT CHANDIGARH . As the entire service tax is exempted as no service tax has to be paid by the appellant. Consequently, the penalties imposed under sections 76, 77 and 78 of the Finance Act also cannot be sustained. The impugned order is set aside - Appeal allowed.
Issues Involved:
1. Whether the service of erection of transmission line towers is exigible to service tax under the head 'erection, commissioning and installation service.' 2. Whether the service is exempted from service tax by Notification no. 11/2010-ST and Notification no. 45/2010-ST. 3. Validity of penalties imposed under sections 76, 77, and 78 of the Finance Act, 1994. Summary of Judgment: Issue 1: Service Tax Exigibility The appellant, M/s. Kailash Devebuild India Pvt. Ltd., provided the service of erection of transmission line towers. The Revenue contended that this service falls under 'erection, commissioning and installation service' and is subject to service tax. However, the appellant argued that the service is exempted by specific notifications. Issue 2: Exemption from Service Tax The appellant claimed exemption under Notification no. 11/2010-ST dated 27.02.2010 and Notification no. 45/2010-ST dated 20.07.2010. Both notifications exempted taxable services related to the transmission of electricity. The Tribunal found that the service of erecting transmission towers is indeed related to the transmission of electricity and thus falls under the exemptions provided by these notifications. The Tribunal cited precedent cases such as M/S. KEC International Ltd. vs. Commissioner, Gurgaon, and M/S. Kedar Constructions vs. Commissioner, Kolhapur, which supported the appellant's position. The Tribunal concluded that the expression 'services relating to transmission of electricity' has a wide ambit and includes the erection of transmission towers, making the service tax not payable. Issue 3: Penalties Given that the service tax was found to be exempted, the Tribunal held that the penalties imposed under sections 76, 77, and 78 of the Finance Act, 1994, could not be sustained. Conclusion: The appeal was allowed, and the impugned order was set aside with consequential relief to the appellant. The Tribunal's consistent view in several precedent decisions confirmed that no service tax is payable for the services relating to the erection of transmission towers for electricity.
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