2023 (9) TMI 1375 - AT - Service Tax

Levy of Service Tax - Commercial and Industrial Construction service (CICS) - activity of Trenching and Laying of PLB pipes and cable works for BSNL - HELD THAT - In the admitted facts and circumstances, the Appellant has not provided any taxable service under any clause or sub-section (105) of Sec 65 of the Finance Act, 1994 in respect of their activity of laying cables under or alongside roads for BSNL. So far as the amount collected from the service receiver and deposited by the Appellant, it is held that the taxes have been rightly deposited and Appellant shall not be entitled to any refund of the same. In the circumstances, all penalties imposed are set aside. Demand set aside - appeal allowed.

Summary

Issues involved: Determination of liability to service tax on trenching and laying of PLB pipes and cable works for BSNL under the head of "Commercial and Industrial Construction service."

The Appellant was engaged in services involving trenching and laying of PLB pipes and cables mainly for BSNL. The Appellant had obtained service tax registration on 01.11.2006 and started filing returns from February 2007. A show cause notice (SCN) was issued demanding service tax for a certain amount, which was adjudicated exparte as the Appellant did not respond. The Adjudicating Authority confirmed the demand of tax along with penalty, stating that the activity fell under Commercial and Industrial Construction service (CICS).

The Appellant appealed to the Commissioner (Appeals) citing a Board Circular dated 24.05.2010, which clarified that laying of cables under or alongside roads is not a taxable service. However, the Commissioner dismissed the Appeal noting that the Circular came after the period in question and part of the tax had been reimbursed by the service receiver from 2007.

Before the Tribunal, the Appellant presented the Board Circular of 2010, which discussed the applicability of service tax on laying of cables under or alongside roads. The Circular stated that such activity is not taxable under any clause of the Finance Act, 1994. The Appellant also relied on certain case laws to support their contention.

After considering the arguments and case laws presented, the Tribunal found that the Appellant did not provide any taxable service under the relevant section of the Finance Act, 1994 regarding the activity of laying cables under or alongside roads for BSNL. The Appeal was allowed, the demand was set aside, and penalties imposed were also lifted. However, the taxes collected and deposited by the Appellant were deemed to be rightly done, and no refund was granted in this regard.

In conclusion, the Appeal was allowed by the Tribunal, and the demand for service tax was set aside based on the clarification provided in the Board Circular and the specific nature of the Appellant's activities.