Service tax exemption on transmission and distribution works supported waiver of pre-deposit and stay of recovery.

Services relating to construction of sub-stations, re-conductering works and sub-contract work for an electricity distribution utility were treated as prima facie covered by the exemption for taxable services rendered in relation to transmission and distribution, so the pre-deposit requirement was waived for those claims. The claim for works executed for CPWD was also found prima facie sustainable based on the Board circular relied upon, and the amount already deposited was held sufficient for hearing the appeal. On that basis, stay of recovery was granted pending appeal.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery on the ground that the impugned services were exempt or otherwise not liable to Service Tax.

Analysis: The services relating to construction of sub-stations, re-conductering works and sub-contract work for the electricity distribution utility were held to fall within the scope of the exemption covering taxable services rendered in relation to transmission and distribution. The claim regarding works undertaken for CPWD was also found prima facie admissible in view of the Board circular relied upon. On this footing, the amounts already deposited were found sufficient to cover the requirement for hearing the appeal.

Conclusion: The requirement of pre-deposit was waived and stay against recovery was granted during the pendency of the appeal.

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