J S Kataria Vs C.C.E. & S.T.-Rajkot (CESTAT Ahmedabad)
CESTAT Ahmedabad held that all the services provided in relation to power transmission is exempted from service tax as per notification 45/2010-ST.
Facts- The appellant mainly carried out various works/services in relation to transmission of electricity namely concrete foundation, excavation of pits, establishment and maintenance of site for storage of materials relating to power transmission tower in the capacity of sub-contractor. The appellant have not discharged the service tax liability on the service provided to their main/principal contractor.
As regard non-payment of service tax, a show cause notice dated 08.09.2009 came to be issued raising the demand of service tax amounting to Rs. 1,17,30,336/- along with interest and penalty. The adjudicating authority vide Order-In-Original dated 10.10.2012, confirmed the service tax demand along with interest and penalty. Being aggrieved by the said Order-In-Original, the appellant preferred the present appeal.
Conclusion- Held that it is settled law that all the services provided in relation to transmission of electricity are exempted under notification no.45/2010-ST therefore, in the present case also services being provided are in relation to power transmission tower, the same are exempted hence the demand is not sustainable on merit.
In the present case, it is not only the larger bench decision which settled the law law but there were contrary circulars of the board on the issue of payment of service tax by the sub-contractor. In view of this position, there is no suppression of fact or any mala fide intention to evade payment of service tax on the part of appellant, therefore, we are of the considered view that the demand beyond one year is not sustainable on limitation also.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The brief facts of the case are that the appellant being a proprietor of proprietorship firm of M/s. Bhumi Construction during the period financial year 2004-05 to 2008-09 provided services to various principal contractors who were primarily engaged in executing government contracts of erection, commissioning, installation or construction of power transmission towers. The appellant mainly carried out various works/services in relation to transmission of electricity namely concrete foundation, excavation of pits, establishment and maintenance of site for storage of materials relating to power transmission tower in the capacity of sub-contractor. The appellant have not discharged the service tax liability on the service provided to their main/principal contractor. In case of some service the appellant has charged and recovered service tax from service recipient, there the appellant has duly discharged the service tax liability.
1.1 As regard non-payment of service tax, a show cause notice dated 08.09.2009 came to be issued raising the demand of service tax amounting to Rs. 1,17,30,336/- along with interest and penalty invoking extended period of limitation of sub-section (1) of section 73 of Finance Act, 1994. The adjudicating authority vide Order-In-Original dated 10.10.2012, confirmed the service tax demand along with interest and penalty. Being aggrieved by the said Order-In-Original, the appellant preferred the present appeal.
02. Shri Rahul Gajera, learned counsel appearing on behalf of the appellant submits that there is no dispute that the service provided by appellant is in relation to power transmission tower in the capacity of subcontractor. He submits that the services have been exempted by a notification no. 45/2010 which provides that any service rendered in relation to transmission and distribution of electricity are exempted from service tax. The expression “relating to” is very wide in its amplitude and scope as held by the Hon’ble Supreme Court in the case of Doypack Systems P. Ltd.- 1988 (36) E.L.T. 201 (SC) therefore, all taxable services rendered in relation to transmission/distribution of electricity would be eligible for benefit of exemption under the said notification for the period up to 27.02.2010. In this behalf, he placed reliance on the following judgments:-
