2019 (2) TMI 764 - AT - Service Tax

Works contract services - erection, commissioning or installation services - site formation services - services provided to DISCOMS - services provided to ONGC as sub-contractor in relation to tunnel work - GTA Service - demand of service tax - period October, 2008 to November, 2011 - Held that - Demand in respect of the services rendered to DISCOMS, up to June, 2010 are unsustainable being retrospectively exempted, as has been upheld by the Tribunal in the case of Unitech Power Transmission Ltd 2018 (5) TMI 1130 - CESTAT HYDERABAD - the service tax demand raised on the appellant for services rendered under erection, commissioning and works contract services for erection of transmission lines for DISCOMS is liable to be set aside - interest and penalties also set aside. Demands raised on goods transport agency - Held that - The appellant is not contesting the same - demand upheld - penalty set aside. Demands raised on the appellant under site formation services etc., for the services rendered as sub-contractor to the main contractor - Held that - The adjudicating authority has not recorded any findings on the submissions of the appellant that these are all rendered to and for consumption of SEZ unit or unit developer - A holistic reading of the notification 04/2004-ST needs to be done by the adjudicating authority - the appeal is remitted back to the adjudicating authority to reconsider the issue afresh. Appeal disposed off.

Summary

Issues Involved:
1. Service tax demand on services provided to DISCOMS
2. Service tax demand on site formation services and services provided to ONGC as a sub-contractor
3. Demand of service tax under goods transport agency services
4. Imposition of penalties

Analysis:

Service Tax Demand on Services Provided to DISCOMS:
The appellant was issued three show cause notices for demand of service tax on services provided to DISCOMS. The adjudicating authority confirmed the demands raised, but the appellant contested on grounds of exemption and limitation. The Tribunal found that services rendered to DISCOMS up to June 2010 were exempted by a retrospective amendment. Relying on previous judgments, the Tribunal set aside the service tax demand for services rendered under erection, commissioning, and works contract services for DISCOMS. Consequently, interest and penalties on this demand were also set aside.

Demand of Service Tax on Site Formation Services and Services Provided to ONGC as a Sub-Contractor:
Regarding the demands raised on site formation services and services provided to ONGC as a sub-contractor, the Tribunal noted that the adjudicating authority did not consider the appellant's argument that these services were rendered to SEZ and eligible for exemption under a specific notification. The Tribunal remitted this portion of the appeal back to the adjudicating authority for reconsideration, emphasizing the need for a holistic reading of the relevant notification and principles of natural justice.

Demand of Service Tax Under Goods Transport Agency Services:
The appellant did not contest the demand raised on goods transport agency services. The Tribunal upheld the service tax liability and interest but held that the appellant should be given the benefit of a specific section to set aside the penalty liability.

Imposition of Penalties:
In the case of penalties imposed, the Tribunal directed that the appellant should be given the benefit of a particular section, resulting in the setting aside of penalties in certain instances. The Tribunal disposed of the appeal accordingly, with specific directions for each issue addressed in the judgment.