S. Chatterjee & Sons (India) Pvt. Ltd. Vs Commissioner of CGST & Central Excise (CESTAT Kolkata)
The Customs, Excise and Service Tax Appellate Tribunal, Kolkata examined whether works contract services relating to laying and repair of electric cables provided to an electricity transmission and distribution company were liable to service tax. The appellant was engaged in activities such as laying and repairing electric cables along or under roads, along with allied works including high-tension construction, laying of pipes, shifting of cable drums and materials, cable jointing, and deployment of watchmen. These activities were carried out on behalf of a power company involved in production, transmission, and distribution of electricity and were incidental to the main activity of cable laying.
An investigation was initiated by the Department, followed by issuance of a show-cause notice demanding service tax on almost the entire income of the appellant, including amounts received towards provident fund reimbursement. The adjudicating authority confirmed the demand, leading to the present appeal.
The appellant contended that transmission or distribution of electricity falls under Clause (k) of Section 66D of the Finance Act, 1994, which places such services in the negative list, making them non-taxable. It was argued that works contract services provided in relation to such transmission or distribution are exempt from service tax under Notification No. 45/2010-ST dated 20.07.2010 and Sl. No. 29(h) of Notification No. 25/2012-ST dated 20.06.2012. The appellant also submitted that whatever service tax had been collected from the service recipient had already been deposited with the Department, and in fact, excess tax had been paid.
