2014 (11) TMI 36 - AT - Service Tax

Activities in relation to transmission and distribution of electricity - activity of preparation of spot bills on hand held computers by taking the meter readings of electricity consumption, distributing the bills, verifying whether there is any tampering of bill - Exemption under Notification No. 45/2010-S.T., dated 20-7-2010 - Business Auxiliary Service - Held that - It cannot be said that the items of work undertaken by the appellants discussed above are not in relation to distribution of electricity and we do not find ourselves in agreement with the findings of the Commissioner. Therefore, we hold that the appellant is eligible for the benefit of this Notification. Further, we notice that portion of the demand relates to the period subsequent to 21-6-2010 and therefore this portion may be liable to service tax. Since this aspect has not been considered by the learned Commissioner and the finding has been limited to applicability of Notification and once it was held that Notification is not applicable there was no need to consider the period subsequent to 21-6-2010, therefore we consider that the matter is required to be remanded for requantifying the demand if it is sustainable in accordance with statutory provisions for levy of service tax. - matter remanded back.

Summary

Issues: Liability for service tax under 'Business Auxiliary Service' for various activities related to electricity distribution. Interpretation of Notification No. 45/2010-S.T. with retrospective effect.

Liability for Service Tax under 'Business Auxiliary Service': The appellant was engaged in activities related to electricity distribution, including preparation of spot bills, meter readings, checking for tampering or malfunctioning, disconnection of default consumers, and more. The Commissioner held that these services were beyond transmission and distribution of electricity, denying the benefit of Notification No. 45/2010-S.T. The Tribunal disagreed, finding that the appellant's services were indeed related to electricity distribution. The Tribunal also noted that a portion of the demand was for a period after 21-6-2010, potentially subject to service tax. As the Commissioner did not consider this aspect, the matter was remanded for reevaluation in accordance with statutory provisions for levy of service tax.

Interpretation of Notification No. 45/2010-S.T.: The appellant argued that the liability no longer subsisted due to Notification No. 45/2010-S.T., which had retrospective effect. This Notification exempted taxable services related to transmission and distribution of electricity up to specific dates. The Tribunal agreed with the appellant, holding that the appellant was eligible for the benefit of this Notification. However, since a portion of the demand was for a period beyond the exemption dates, the matter was remanded for further assessment by the adjudicating authority to determine the sustainability of the demand for service tax.

In conclusion, the Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority for a fresh decision based on the observations made regarding the applicability of Notification No. 45/2010-S.T. and the potential liability for service tax for the period subsequent to the exemption dates specified in the Notification.