2016 (11) TMI 199 - AT - Service Tax

Levy of tax - erection and commissioning of transmission lines - erection of poles required for distribution of electricity for clients - N/N. 45/2010-ST dated 20.07.2010 - Held that - the activity of appellant as enumerated in paragraph No.2 herein above is undisputed and is in respect of transmission and distribution of electricity and undisputed also. If that be so, we hold that Notification No. 45/2010 dated 20.07.2010 will apply in full force for the period covered in this appeal as per wordings of notification. Accordingly, we hold that for the period in question in this appeal no tax liability arises. However, we have to note the concern of the learned D.R. that the appellant has collected amounts from their customers as service tax. Since no records are produced, we remit the matter back only for a limited purpose to examine whether appellant has collected service tax from their customers/clients during the period, if so same should be recovered with interest from the appellant - appeal allowed - remand on limited point - decided in favor of appellant.

Summary

Issues involved:
Whether the appellant is liable to service tax on activities related to erection and commissioning of transmission lines and poles for electricity distribution.

Analysis:
The appeal was filed against the order-in-appeal dated 20.01.2012. The issue in question was whether the appellant is liable to pay service tax for activities related to the erection and commissioning of transmission lines and poles for electricity distribution. Both lower authorities concluded that the appellant is liable for tax under Erection and Commissioning Services and Works Contract Services for the period April 2005 to March 2010.

The appellant's advocate highlighted a government notification exempting tax on services related to transmission and distribution of electricity (Notification No. 45/2010-ST dated 20.07.2010) and referenced a previous decision by the bench in a similar case. The advocate argued that the impugned order should be set aside, and the appeal allowed with consequential relief.

The Assistant Commissioner (A.R.) acknowledged the applicability of the 11C Notification but raised concerns about the appellant collecting service tax from service recipients. After considering the submissions and perusing the records, the Tribunal found that the appellant's activities were undisputedly related to the transmission and distribution of electricity. Consequently, the Tribunal held that the Notification No. 45/2010 dated 20.07.2010 would apply, absolving the appellant of tax liability for the period in question.

However, in response to the concern raised by the learned D.R. regarding the appellant collecting service tax from customers without producing records, the Tribunal remanded the matter for further examination. The Tribunal directed a limited remand to verify whether the appellant had indeed collected service tax from customers during the relevant period, with instructions for recovery if found to be the case.

Ultimately, the appeal was allowed with consequential relief, subject to the limited remand for the specific purpose outlined. The impugned order was set aside, and the appeal was allowed by the Tribunal.