2019 (2) TMI 687 - AT - Service Tax

Erection and commissioning or installation services - works contract services - composite electrical contracts such as supply construction erection testing and commissioning of substations switch station transmission lines distribution lines distribution transformers etc to APTRANSCO electrical companies such as APSPDCL APEPDCL in the state of Andhra Pradesh - N/N. 45/2010 dated 20.07.2010 - Held that - The said notification was considered by this Bench in the case of Unitech Power Transmission Ltd 2018 (5) TMI 1130 - CESTAT HYDERABAD and Hyderabad Power Installations Pvt Ltd 2016 (7) TMI 1151 - CESTAT HYDERABAD and relief was granted to the assessee/appellant therein - the service tax liability on the appellant for the services rendered relating to transmission and distribution of electricity is unsustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Tax liability on the appellant under works contract services and erection, commissioning, or installation services.
2. Demand confirmed on the appellant under GTA services.

Analysis:
1. The appeal before the Appellate Tribunal CESTAT Hyderabad was regarding the tax liability of the appellant for services rendered related to transmission and distribution of electricity, as well as the demand under GTA services. The appellant was involved in executing composite electrical contracts from October 2004 to March 2009 for various entities in Andhra Pradesh. The revenue contended that the appellant's activities fell under 'erection and commissioning or installation services' and 'works contract services' liable to duty. The Tribunal noted that the issue of tax liability under these services was not new and had been addressed in previous cases. Referring to a retrospective notification under Sec.66 of the Finance Act, 1994, the Tribunal relied on precedents like Unitech Power Transmission Ltd and Hyderabad Power Installations Pvt Ltd to grant relief to the appellant, setting aside the tax liability related to transmission and distribution of electricity.

2. Moving on to the demand confirmed on the appellant under GTA services, the Tribunal found that the demand was made under the reverse charge mechanism for a specific period. Despite the appellant's arguments regarding the fluctuating nature of demand during that period, the Tribunal upheld the demand of &8377;1,22,504/- along with interest. However, the Tribunal exercised its powers under Sec.80 of the Finance Act, 1994 to set aside the penalties imposed on the appellant. Consequently, the appeal was allowed, and the penalties were overturned.