Service Tax Upheld for Street Lights Installation; Cable Laying Exempt

The tribunal upheld the demand for service tax on the installation of street lights under works contract service, considering it a taxable independent service not directly related to road construction. The demand was deemed timely as the appellant failed to disclose the services in their returns. However, the demand for other services like laying of cables under road widening activities was set aside based on a Board Circular stating their non-taxability.

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Issues:
1. Taxability of installation of street lights under works contract service.
2. Time limitation for raising demand.
3. Taxability of other services like laying of cables under road widening activities.

Analysis:

Issue 1: Taxability of installation of street lights under works contract service
The appellant entered into contracts for services like installation of electrical equipment and street lights. The appellant argued that the service of installing street lights is related to road construction and should not be taxable under works contract service. However, the tribunal disagreed, stating that the installation of street lights is an independent service not directly related to road construction, thus falling under works contract service and being taxable during the relevant period.

Issue 2: Time limitation for raising demand
The appellant claimed that the demand was time-barred as the department was aware of their activities due to a previous show cause notice. However, the tribunal found that for the subsequent period, the appellant did not disclose the installation of street lights in their returns, leading to a suppression of facts. As a result, the demand was upheld on both merit and limitation grounds.

Issue 3: Taxability of other services like laying of cables under road widening activities
The appellant contested the demand related to services like laying of cables under road widening activities, citing a Board Circular stating that such services are not taxable. The tribunal agreed with this argument, referring to the Board Circular, and set aside the demand related to these services. The tribunal upheld the demand for installation of street lights under works contract service but dropped the demand for other services based on the Circular.

In conclusion, the tribunal upheld the demand for service tax on the installation of street lights under works contract service, citing it as a taxable independent service. The tribunal also found the demand to be within the time limitation due to the appellant's failure to disclose the services in their returns. However, based on the Board Circular, the demand related to other services like laying of cables under road widening activities was set aside.

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