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2024 (3) TMI 559 - AT - Service TaxTaxability - services rendered by the appellant in relation to distribution of electricity to power distribution companies of Andhra Pradesh (APEPDCL, APSPDCL) - exempt under Notification No. 45/2010-ST dated 20.07.2010 or not - services rendered to Educational Institutions, CPWD and Railways are taxable under Commercial or Industrial Construction services or not - invocation of extended period of limitation - interest - penalties under Section 76, 77 (2) and 78 of Finance Act, 1994. Construction of sub-stations and other related works of distribution of electricity for APEPDCL/APSPDCL - Re-conductoring works to APEPDCL - Sub contract works erection works relating to 30/11 KV substations with connected lines for APEPDCL - Works relating to provision of Distribution of Electricity services to APEPDCL at APSEZ, Atchutapuram (Visakhapatnam) - HELD THAT - There is no dispute with regard to provision of services in relation to distribution of electricity to the power distribution companies. That Notification No.45/2010-ST dated 20.07.2010 is service specific. Therefore, the denial of the exemption by the Original Authority has no legal sanctity. Accordingly, following the precedent judgements, the demand of tax amounting to Rs.1,09,26,745/- set aside. Construction works for educational institutions RGUKT, Basara and Vedic University Tirupati provided as subcontractors - Works for CPWD - Works of Railway - HELD THAT - The demand was confirmed by the original authority, not on merit but due to non-production of agreements. These agreements, either produced along with the appeal or on the day of hearing, confirm that the services were provided to the non-commercial organisations. Therefore, the services are not intended for commerce or industry. These are also covered by CBEC Circular dated 17.09.2004. Accordingly, the demand amounting to Rs.10,04,292/- set aside on this count. Civil works - Private construction works - HELD THAT - Rs.49,65,268/- out of the total demand of Rs.52,39,101/- was paid in the normal course. The differential amount of Rs.2,73,833/- was paid along with interest of Rs.5,93,032/- on 04.03.2024. Thus wherever the tax liability was there, the same was discharged along with interest by the appellant. Interest and penalty - HELD THAT - The demand of interest under Section 75 and also imposition of penalty under Section 76 and 78 of the Finance Act, 1994 set aside. Appeal allowed in part.
Issues:
1. Taxability of services related to distribution of electricity to power distribution companies 2. Taxability of services provided to Educational Institutions, CPWD, and Railways 3. Invocation of extended period for demand 4. Imposition of penalties under Section 76, 77(2), and 78 of Finance Act, 1994 Taxability of services related to distribution of electricity to power distribution companies: The Appellant, registered for taxable services, provided services including erection, commissioning of electrical sub-stations, construction of switch yards, and other related works to power distribution companies. A show cause notice was issued demanding service tax, which was confirmed by the Commissioner. The Appellant contended that the services are exempt under Notification No. 45/2010-ST. The Tribunal, after considering the submissions, set aside the demand of tax amounting to Rs.1,09,26,745 as the services were covered by the said notification. Taxability of services provided to Educational Institutions, CPWD, and Railways: The Appellant also provided services to Educational Institutions, CPWD, and Railways. The demand for these services was confirmed due to non-production of agreements. However, agreements produced later confirmed that the services were provided to non-commercial organizations, not intended for commerce or industry. The Tribunal set aside the demand amounting to Rs.10,04,292 for these services. Invocation of extended period for demand: The demand for taxes related to certain services was made by invoking the extended period of limitation. However, as the Tribunal found the services to be exempt or non-taxable, the demand was set aside. Imposition of penalties under Section 76, 77(2), and 78 of Finance Act, 1994: The Appellant argued against the imposition of penalties under Section 76 and 78, citing case laws to support their stance. The Tribunal considered the submissions and set aside the demand of interest and penalties under Section 76 and 78 of the Finance Act, 1994. Conclusion: After considering the submissions and case laws cited, the Tribunal allowed the appeal in part and set aside the impugned order. The demand for taxes on certain services was overturned based on exemptions and non-taxability, and the penalties under Section 76 and 78 were also set aside.
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