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of <h1>CESTAT rules electricity transmission services exempt from service tax</h1> <h3>Commissioner of Customs, Central Excise & Service Tax, Noida-II Versus M/s PME Power Solution (India) Pvt. Ltd.</h3> The Appellate Tribunal CESTAT ALLAHABAD upheld that services related to the transmission of electricity were exempt from service tax under Section 66D of ... Exemption to power transmission related services - Exemption rescinded by Notification No.34/2012-ST dated 20.06.2012 - Work Contract service provided to M/s U P Power Transmission Corporation Ltd. - Held that:- The services in respect of transmission or distribution of electricity have been exempted through Clause (k) to Section 66 D of Finance Act, 1994 w.e.f. 01.07.2012. For earlier period the same exemption was provided through Notification No. 11/2010-ST dated 27.02.2010. After going through the wordings and phrases used we do not find any change in the provision of law. We note that whatever was exempted through a notification earlier was subsequently exempted through provision of law in the Finance Act. The allegations in the show cause notice were not sustainable - Appeal dismissed - decided against Revenue. Issues:1. Validity of service tax demand for services provided in relation to transmission of electricity.2. Taxability of job charges under the provisions of the Finance Act, 1994.Issue 1:The Appellate Tribunal CESTAT ALLAHABAD examined the appeal raised by the Revenue regarding the validity of a service tax demand for services provided in relation to the transmission of electricity. The Revenue contended that after the rescission of Notification 11/2010 Service Tax, the party was liable to pay service tax for providing services under a 'Work Contract' to a profit-making business entity. The Tribunal analyzed the relevant provisions of the Finance Act, noting that services related to the transmission or distribution of electricity were exempted under Section 66D. The Tribunal observed that the exemption provided through Notification 11/2010 was subsequently incorporated into the Finance Act. Therefore, the Tribunal found no change in the law and upheld that the services in question were exempt from service tax. Consequently, the Tribunal rejected the Revenue's appeal, affirming the Order-in-Original.Issue 2:The Tribunal also addressed the taxability of job charges under the Finance Act, 1994. The Original Authority examined the job charges allegedly received by the party and found them not taxable under service tax law as they were related to the export of services. Additionally, allegations regarding TDS deductions made by service receivers were refuted by the party with supporting evidence. The Tribunal concurred with the Original Authority's findings, stating that the allegations lacked a basis and were unsustainable. Consequently, the Tribunal held that the demand raised by the Revenue was not sustainable. As a result, the Tribunal dismissed the Revenue's appeal, upholding the Order-in-Original and rejecting the demand of service tax on the job charges.
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