Tribunal finds in favor of appellant on service tax liability for laying Optical Fiber Cables

The Tribunal allowed the appeal, finding in favor of the appellant regarding service tax liability for laying Optical Fiber Cables. The Tribunal considered the CBEC circular and previous legal decisions, noting similarities to cases ruled in favor of appellants. Despite Revenue's arguments, the Tribunal found a prima facie case for the appellant based on the circular and legal precedents, leading to the appeal's allowance without additional deposits. The Tribunal emphasized that the nature of the cables did not change the core issue, ultimately setting aside the service tax demand and allowing the appeal, except for the deposited amount.

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Issues Involved:
Service tax liability under Commercial or Industrial Construction Services for laying Optical Fiber Cables.

Analysis:
The appeal was filed against Order-in-Original No. 17/ST/2011-12/C dated 28/10/2011. The issue revolved around the service tax liability of the appellant concerning the laying of Optical Fiber Cables for telecom service providers. The Revenue claimed the activity was taxable, while the appellant cited CBEC circular no. 123/5/2010-TRU dated 24/05/2010, stating that laying cables alongside or under roads is not a taxable service under the Finance Act 1994. The Tribunal found the circular applicable and criticized the adjudicating authority for not following it. The appellant's activities were limited to laying cables alongside or under roads for telecom service providers, similar to cases where the Tribunal ruled in favor of the appellants.

The Tribunal referenced a case involving trenching and laying underground telephone cables, where the appellant did not pay service tax, claiming the activities were not taxable services. The Revenue argued that the activities fell under Erection, Commissioning, or Installation services, making them liable for service tax. The Tribunal noted the appellant's reliance on the CBEC circular and a High Court judgment supporting their position. Despite the Revenue's attempts to distinguish cases, the Tribunal found a prima facie case for the appellant based on the circular and legal decisions, leading to the appeal's allowance without requiring further deposits.

The Tribunal compared the issues in the present case to a previous case involving similar activities, emphasizing that the nature of the cables used by the appellant did not alter the core issue. The departmental representative mentioned the appellant's deposit of a substantial amount, which the appellant agreed not to seek a refund for. Consequently, the Tribunal held that apart from the deposited amount, the service tax demand failed, setting aside the impugned order and allowing the appeal.

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