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2025 (1) TMI 1446 - AT - Service TaxApplicability of Service Tax on certain services provided by the appellant - classification and exemption of services under the categories of Construction of Complex Service (CCS) and Management Maintenance or Repair Service (MMRS) - HELD THAT - It is obvious that in the course of adjudication they were able to exclude certain activities not covered within the MMRS to building etc. for which the feasibility under the exemption notification 45/2010-ST was also examined. It is also obvious that while examining the same the Adjudicating Authority felt that they will fall either in the category of transmission or distribution of electricity and by considering that in relation to is an expression which includes varied nature of activities and therefore granted them the benefit of exemption notification in relation to such activities which were not covered by virtue of section 98 of the Finance Act 2012. In respect of non-commercial MMRS to buildings after the amendment in Finance Act 2012 vide section 98 no demand will survive. For the MMRS to others the exemption notification 45/2010-ST needs to be examined and we have examined the same. It is found that there was Notification No. 11/2010-ST dt.27.02.2010 which exempted the services provided for transmission of electricity. Similarly in terms of Notification No. 32/2010-ST dt.22.06.2010 the services provided for distribution of electricity were exempt - the Adjudicating Authority has considered this notification 45/2010-ST to cover that entire activity of MMRS as falling in the category of transmission and distribution of electricity. N/N. 45/2010-ST does not provide for such expression and it merely covers services in relation to transmission and distribution of electricity. The Adjudicating Authority has clearly brought out these facts in the impugned order and has categorically held that these activities are squarely covered within the ambit of transmission or distribution of electricity. In view of the same we find that there is nothing wrong in the order of the Commissioner extending the benefit of notification 45/2010-ST for MMRS provided in relation to transmission and distribution of electricity to defence establishments. Conclusion - i) The demand for Service Tax under CCS for the period prior to 01.07.2010 is unsustainable. ii) The MMRS provided to non-commercial government buildings specifically defense establishments are exempt from Service Tax for the period covered by the SCN as per the amendment in the Finance Act 2012 section 98. iii) The application of Notification No. 45/2010-ST to MMRS related to transmission and distribution of electricity is appropriate and the exemption is applicable to the appellant s services. Appeal allowed.
The judgment involves two appeals concerning the applicability of Service Tax on certain services provided by the appellant, M/s Eldi Tech, and the interpretation of relevant exemptions. The core issues revolve around the classification and exemption of services under the categories of 'Construction of Complex Service' (CCS) and 'Management, Maintenance or Repair Service' (MMRS).
1. Issues Presented and Considered The Tribunal considered the following key issues:
2. Issue-Wise Detailed Analysis Issue 1: Leviability of Service Tax on CCS The Tribunal noted that the demand for CCS pertained to a period before 01.07.2010. It referenced the settled legal position that such demands are not sustainable for periods prior to this date, indicating that the matter is no longer res integra. Consequently, the demand for Service Tax under CCS for the specified period was deemed unsustainable. Issue 2: Leviability of Service Tax on MMRS The appellant argued that MMRS services were provided exclusively to defense establishments, which they believed were exempt based on a clarification from the Ministry of Defense. Furthermore, the Finance Act, 2012, via section 98, exempted MMRS of non-commercial government buildings from Service Tax for periods before section 66B came into force. The Tribunal acknowledged that the services were indeed provided to defense establishments and agreed that the exemption under section 98 applied to non-commercial government buildings, thus nullifying the demand for this period. However, the Department contended that the exemption was limited to non-commercial government buildings and did not extend to equipment and other installations. The Tribunal examined the original SCN and found that the MMRS included services beyond buildings, such as equipment and diesel generator sets. Despite this, it concluded that the exemption under Notification No. 45/2010-ST applied to services related to transmission and distribution of electricity, which covered the appellant's activities. Issue 3: Applicability of Notification No. 45/2010-ST The Tribunal examined the applicability of Notification No. 45/2010-ST, which exempted services related to transmission and distribution of electricity. It noted that the notification did not restrict the exemption to specific categories but broadly covered services related to electricity transmission and distribution. The Adjudicating Authority had correctly applied this notification to the appellant's activities, and the Tribunal found no reason to overturn this decision. 3. Significant Holdings The Tribunal held that:
In conclusion, the Tribunal set aside the order of the Commissioner dated 22.11.2011, allowing the appellant's appeal (ST/198/2012) and dismissed the Department's appeal (ST/30676/2017).
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