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of <h1>Waiver granted on substantial service tax demand for rural electrification program; stay on further proceedings.</h1> <h3>NTPC ELECTRIC SUPPLY CO. LTD. Versus COMMR. OF C. EX. & S.T., NOIDA</h3> NTPC ELECTRIC SUPPLY CO. LTD. Versus COMMR. OF C. EX. & S.T., NOIDA - 2015 (39) S.T.R. 295 (Tri. - Del.) Issues:1. Waiver of pre-deposit and stay of further proceedings for realization of tax, interest, and penalties.2. Interpretation of Notifications No. 45/2010-S.T., 11/2010-S.T., and 32/2010-S.T. regarding service tax liability in relation to transmission and distribution of electricity.3. Determination of whether the services provided by the petitioner fall under the category of erection, commissioning, or installation service.Detailed Analysis:1. The case involved a request for waiver of pre-deposit and stay of further proceedings regarding a substantial service tax demand confirmed by the adjudication order. The petitioner, engaged in activities related to rural electrification programs, was subjected to a service tax demand of a significant amount along with interest and penalties. The primary relief sought was the waiver of pre-deposit and a stay on the realization of the liability pending the appeal process.2. The Tribunal examined the Memorandum of Understanding (MoU) between Rural Electrification Corporation Ltd. (REC) and the petitioner, which outlined various services to be provided, including consulting engineer services. The petitioner was initially compliant with the service tax liability for consulting engineer services. However, a dispute arose regarding additional services provided by the petitioner to State Governments and State Power Utilities, leading to the imposition of service tax liability under the category of erection, commissioning, or installation service.3. The petitioner contended that the services provided did not fall under the definition of erection, commissioning, or installation service. Alternatively, the petitioner argued for immunity from service tax liability based on Notifications No. 45/2010-S.T., 11/2010-S.T., and 32/2010-S.T. The Tribunal analyzed previous judgments and interpretations of these notifications, emphasizing that services related to the provision of infrastructure for the transmission of electrical energy were exempt from service tax. Based on this analysis, the Tribunal found a strong prima facie case in favor of the petitioner and granted the waiver of pre-deposit and a stay on further proceedings for the realization of the adjudicated liability.In conclusion, the Tribunal's judgment focused on the interpretation of relevant notifications to determine the applicability of service tax liability in the context of services provided for the transmission and distribution of electricity. The decision favored the petitioner, granting relief in the form of a waiver of pre-deposit and a stay on further proceedings pending the appeal process.
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