Prima facie exemption under the electricity transmission notification barred insistence on pre-deposit for hearing the appeal.

A prima facie reading of Notification No. 45/2010-ST extended exemption to taxable services relating to transmission and distribution of electricity, and not only to transmission services narrowly understood. On that basis, the insistence on pre-deposit before hearing the appeal was held unjustified. The pre-deposit direction was set aside and the matter was remanded for disposal of the appeal without requiring such deposit.

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Issues: Whether the appellant was prima facie entitled to the benefit of Notification No. 45/2010-ST so that the appeal could be heard without insisting on pre-deposit.

Analysis: The appellant claimed exemption under Notification No. 45/2010-ST for services relating to transmission and distribution of electricity. The order under challenge had confined the benefit to taxable service of transmission provided by the transmission company and had therefore insisted on pre-deposit. On a prima facie reading, the notification was found to cover taxable services relating to transmission and distribution of electricity by a person to another person during the relevant period, and not to be so narrowly restricted. In that view, the insistence on pre-deposit was not justified at the stage of hearing the appeal.

Conclusion: The appellant was prima facie entitled to the notification benefit and the appeal ought to have been heard without pre-deposit.

Final Conclusion: The order insisting on pre-deposit was set aside and the matter was sent back for disposal of the appeal without such insistence.

Ratio Decidendi: Where a notification granting exemption is prima facie applicable, the appellate authority should not insist on pre-deposit to hear the appeal.

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