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of <h1>Revenue's Appeal Dismissed, Electricity Services Exemption Confirmed</h1> The Tribunal dismissed the Revenue's appeal, confirming the exemption for services related to the transmission and distribution of electricity for a ... Levy of service tax - services provided to Andhra Pradesh Central Power Distribution Company Ltd., (APCPDCL) and Andhra Pradesh Northern Power Distribution Company Ltd., (APNPDCL) - suppression of facts or not - levy of penalty - HELD THAT:- Same issue arose before this Tribunal Co-Ordinate Bench in the case of SHRI GANESH ENTERPRISES VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX [2014 (2) TMI 436 - CESTAT BANGALORE] wherein this Tribunal taking notice of Notification No. 45/2010-ST dated 20.07.2010 wherein exemption was granted under Section 11C of the Central Excise Act read with Finance Act, held Central Government granted exemption in respect of any taxable service provided in relation to transmission and distribution of electricity during the period upto 26.02.2010. Accordingly, as a consequence of the exemption granted the service tax liability of the assessee was held, that the same stands eclipsed and accordingly the demand was set aside allowing the appeal. The said order have been following by this Bench in SRI VENKATESWARA ELECTRICAL AND POWER EQUIPMENT CO. VERSUS COMMISSIONER OF CENTRAL TAX, GUNTUR [2023 (7) TMI 545 - CESTAT HYDERABAD] wherein also the assessee was a small contractor undertaking various works like erection and commissioning, repair of transformers, cables etc to power distribution companies. Facts on the records were specifying that the services rendered by the respondent assessee are covered under scope of exemption granted vide Notification No. 45/2010-ST till the period 21.06.2010, in respect of service to distribution company and till 26.02.2010 in respect of transmission companies. Accordingly, the demand for the relevant period stands set aside. Penalties - HELD THAT:- There are no malafide or suppression in non-payment of the tax. Accordingly, penalties for the whole period are set aside. The appeal of Revenue is dismissed. Issues:The main issue involved in this case is whether the Respondent assessee is required to pay service tax on services provided to Andhra Pradesh Central Power Distribution Company Ltd., (APCPDCL) and Andhra Pradesh Northern Power Distribution Company Ltd., (APNPDCL).Summary of Judgment:Issue 1: Service Tax Liability on Services Provided to Power Distribution CompaniesThe Respondent, a small contractor, had not paid service tax on services provided to the power distribution companies. The Revenue issued show cause notices alleging non-payment of service tax for various services provided. The Order-in-Original held that the assessee is entitled to exemption from service tax for services related to the transmission and distribution of electricity. However, the exemption did not cover all services, and the assessee was liable to pay tax for certain services from specific dates. The demand was modified and reduced based on the findings.Issue 2: Adjudication of Show Cause NoticesThe show cause notices were adjudicated, and the assessee's claims for exemption under relevant circulars and notifications were considered. The Order-in-Original disallowed certain claims due to lack of documentary evidence. The assessee was not granted threshold exemption benefit as the taxable amount exceeded the exemption limit. The demand was modified and reduced accordingly.Issue 3: Penalty ImpositionPenalties were imposed on the assessee under various sections of the Finance Act, 1994. The Revenue appealed the dropping of part of the demand, arguing that the exemption under Notification No. 45/2010-ST does not cover services provided by the assessee to transmission and distribution companies. The Tribunal considered similar cases and held that the services provided by the assessee were covered under the exemption until specific dates. Penalties were set aside due to the absence of malafide intent or suppression in non-payment of tax.Final DecisionThe Tribunal dismissed the appeal of the Revenue, confirming the exemption for the relevant period and setting aside penalties. The judgment was dictated and pronounced in open court.This summary provides a detailed overview of the issues involved in the legal judgment, including the service tax liability, adjudication of show cause notices, and penalty imposition, along with the final decision of the Tribunal.
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