2016 (7) TMI 599 - AT - Service Tax

Erection Commissioning or Installation Services (ECIS) - Activity of supply of material, erection and installation of sub-stations, related lines, installation of transformers and other electrical equipments etc. - Held that - the demand raised under ECIS is unsustainable and requires to be set aside which we hereby do.

Summary

Issues:
Service tax liability on Erection Commissioning or Installation Services (ECIS) and Renting of Immovable Property Services.

Analysis:
The appellant, registered with the Service Tax Department, was found to have entered into contract agreements with Power Distribution/Transmission Companies involving supply of material, erection, installation of sub-stations, and leasing land to a business organization. The Department alleged that the appellant provided taxable services under ECIS and Renting of Immovable Property Services without disclosing or paying the appropriate service tax. In adjudication, a service tax demand of Rs. 60,68,455/- for ECIS and Rs. 4,91,145/- for Renting of Immovable Property was confirmed.

The appellant's counsel argued that the challenge was limited to the demand under ECIS, citing precedents where similar issues were settled. The Tribunal observed that the appeal was covered by previous judgments, including one where an exemption under Notification No. 45/2010-ST related to transmission and distribution of electricity was discussed. It was concluded that the appellant was eligible for the benefit of the Notification, and the demand under ECIS was unsustainable. The Tribunal set aside the demand for ECIS but did not interfere with the demand for Renting of Immovable Property. The appeal was partly allowed with consequential reliefs, if any.

In conclusion, the Tribunal found the demand under ECIS to be unsustainable based on the precedents and granted relief to the appellant. The judgment highlighted the importance of considering relevant notifications and legal precedents in determining service tax liabilities.