2018 (6) TMI 1255 - AT - Service Tax

Services for Transmission of electricity - Benefit of N/N. 11/2010 dated 27/02/2010 - denial on the ground that the appellant is also setting up infrastructure under the supervision of engineer of the contracted MPPKVV Company Ltd. for transmission of electricity - Held that - The work done by the appellant is admittedly exempt under N/N. 32/2010-ST readwith N/N. 45/2010-ST and N/N. 11/2010-ST. - Tribunal in the case of Noida Power Co. Ltd. 2013 (8) TMI 746 - CESTAT NEW DELHI , held that any activity or service like erection, commissioning and installation of transmission towers and meters as also technical testing and analysis would constitute the activity of transmission and distribution by the service provider to the service receiver. And such service would be squarely covered under exemption provided under this notification. The appellant is entitled to the exemption benefit under the Notification, in question, and the work done by them being in the nature of work towards transmission of electricity, they are not liable to service tax for the same - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Eligibility for exemption under Notification No. 11/2010 for transmission of electricity services.
2. Rejection of exemption claim by the Commissioner.
3. Eligibility for threshold exemption.
4. Maintainability of appeal due to disputed amount.

Analysis:

1. The primary issue in this appeal was the eligibility of the appellant for exemption under Notification No. 11/2010 for services related to the transmission of electricity. The appellant had undertaken work involving laying electric cables, LT lines, and installing electrical devices like transformers. The Commissioner rejected the exemption claim, stating that the appellant was also setting up infrastructure for electricity transmission and not exclusively providing transmission services. However, the Tribunal held that the work done by the appellant fell under the exemption provided by Notification No. 32/2010-ST and Notification No. 45/2010-ST, along with Notification No. 11/2010-ST. The Tribunal relied on a previous ruling to support the appellant's claim for exemption.

2. The Commissioner had also rejected the appellant's claim for exemption under Notification No. 11/2010 for work related to erection of DG structure, transformer installation, and extension of LT lines. The Tribunal disagreed with this rejection and allowed the appellant's appeal, stating that the work done by the appellant was indeed exempt under the relevant notifications, as it was part of the transmission of electricity services.

3. Another aspect considered was the eligibility of the appellant for threshold exemption. It was observed that since the appellant had charged the gross amount, the threshold exemption was deemed inadmissible. This point did not heavily impact the final decision on the exemption claim under the relevant notifications.

4. Additionally, the issue of the appeal's maintainability due to the disputed amount being less than a certain threshold was raised. The Tribunal, after considering the arguments from both sides, found that the appellant was entitled to the exemption benefit under the notifications in question. Consequently, the appeal was allowed, and the impugned order was set aside, granting the appellant the exemption they were seeking. The appellant was also deemed eligible for consequential benefits as per the law.

In conclusion, the Tribunal's decision favored the appellant, recognizing their eligibility for exemption under the specified notifications for services related to the transmission of electricity, and setting aside the Commissioner's rejection of the exemption claim.