9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (11) TMI 336 - AT - Service TaxCommercial or Industrial Construction service - services rendered in relation to transmission and distribution of electricity - exemption from service tax vide Notification No. 45/10-ST dated 20.7.2010 - Held that - out of the total demand confirmed of ₹ 2,04,14,368/- bulk of the demand of ₹ 1,90,47,124/- pertains to Commercial or Industrial Construction service rendered to Maharashtra State Electricity Transmission Co. Ltd., Maharashtra State Electricity Distribution Co. Ltd., Sunil Hi-Tech, Suraj Constructions, V.B. Bhike, etc. for transmission of electricity. Vide Notification 45/10-ST, all taxable services rendered in relation to transmission and distribution of electricity have been exempted from the purview of service tax. The expression relating to is very wide in its amplitude and scope as held by the Hon ble Apex Court in Doypack Systems P. Ltd. 1988 (2) TMI 61 - SUPREME COURT OF INDIA . Therefore, all taxable services rendered in relation to transmission/distribution of electricity would be eligible for the benefit of exemption under the said Notification for the period prior to 27.02.2010. Various activities undertaken by the appellant, though classifiable under Commercial or Industrial Construction prior to 01.06.2007 or under works contract service on or after 01.06.2007, would be eligible for the benefit of exemption as held by this Tribunal in the case of Noida Power Co. Ltd. 2013 (8) TMI 746 - CESTAT NEW DELHI , Pashchimanchal Vidyut Vitran Nigam 2012 (8) TMI 688 - CESTAT, NEW DELHI , Purvanchal Vidyut Vitran Nigam 2012 (10) TMI 104 - CESTAT, NEW DELHI and Shri Ganesh Enterprises 2014 (2) TMI 436 - CESTAT BANGALORE . Therefore, the confirmation of service tax demand in respect of the construction, maintenance or repair activities undertaken by the appellant so far as it relates to the transmission/distribution of electricity cannot be sustained in law. in respect of the other activities of the appellant which are not related to either transmission or distribution of electricity, the demands confirmed are upheld along with interest - since the issue relates to interpretation of an exemption Notification and the statutory provisions, imposition of penalties are not warranted - Decided partly in favour of assssee.
Issues:
1. Service tax demand on construction services related to transmission of electricity. 2. Eligibility for exemption under Notification No. 45/10-ST and 11/10-ST. 3. Interpretation of the expression "for the purpose of" in relation to transmission of electricity. 4. Dispute regarding tax liability for activities not related to transmission or distribution of electricity. 5. Imposition of penalties. Analysis: 1. Service Tax Demand on Construction Services Related to Transmission of Electricity: The appeal challenged a service tax demand of Rs. 2,04,14,368 against M/s. Kedar Constructions for construction of sub-stations and maintenance/repair activities related to transmission of electricity. The appellant claimed eligibility for exemption under Notification No. 45/10-ST for services rendered "in relation to" transmission and distribution of electricity. The Tribunal noted the wide scope of the expression "relating to" as interpreted by the Supreme Court and granted exemption for activities related to transmission of electricity. 2. Eligibility for Exemption under Notification No. 45/10-ST and 11/10-ST: The appellant argued that their activities fell under the exemptions provided for transmission of electricity under Notification No. 45/10-ST and 11/10-ST. The Tribunal upheld the exemption for services rendered "for the purpose of" transmission of electricity, considering the broad definition of transmission in the Electricity Act, 2003. The demands related to construction, maintenance, or repair activities in connection with transmission/distribution of electricity were deemed exempt from service tax. 3. Interpretation of the Expression "For the Purpose of" in Relation to Transmission of Electricity: The Tribunal interpreted the expression "for the purpose of" transmission of electricity based on the Supreme Court decision in the case of Indian Chamber of Commerce. The definition of transmission in the Electricity Act, 2003 encompassed a wide range of activities, including sub-stations and equipment, making activities related to transmission eligible for exemption under the Notifications. 4. Dispute Regarding Tax Liability for Activities Not Related to Transmission or Distribution of Electricity: The appellant did not dispute the tax liability for activities such as construction of a transformer station for a sugar factory or Goods Transport Agency services, which were not directly related to transmission or distribution of electricity. The Tribunal upheld the demands for such activities, confirming the tax liability along with interest. 5. Imposition of Penalties: Considering the issue involved interpretation of an exemption Notification and statutory provisions, the Tribunal found no basis for imposing penalties on the appellant. Therefore, the penalties imposed were set aside, and the appeal was partly allowed based on the above analysis. This detailed analysis of the judgment highlights the key issues addressed by the Tribunal regarding service tax demands, eligibility for exemptions, interpretation of legal expressions, tax liability for specific activities, and the imposition of penalties.
|
