Electricity transmission and distribution works covered by exemption under Notification No. 45/2010-ST; service tax demand and penalties fail.

Services rendered in relation to erection and allied works for electricity transmission and distribution were treated as covered by Notification No. 45/2010-ST, which exempted taxable services connected with transmission or distribution of electricity for the relevant period. On that basis, the service tax demand was held not sustainable. The Tribunal also found no mala fide intent or suppression in non-payment, so the penalties could not survive and were set aside.

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Issues: Whether services rendered in relation to erection and allied works for electricity transmission and distribution companies were covered by the exemption granted under Notification No. 45/2010-ST, and whether the service tax demand and penalties could therefore survive.

Analysis: Notification No. 45/2010-ST was issued to settle disputes concerning taxable services connected with transmission and distribution of electricity for the relevant period. The Tribunal applied the settled view that services provided in relation to transmission or distribution of electricity fell within the exemption for the period covered by the notification. The services undertaken by the appellant, being connected with electricity distribution works, were treated as covered by the exemption, and the demand was held not sustainable for the relevant period. The Tribunal also accepted that no mala fide or suppression was made out for non-payment.

Conclusion: The issue was answered in favour of the assessee. The service tax demand did not survive for the relevant period and the penalties were also set aside.

Ratio Decidendi: Services provided in relation to transmission or distribution of electricity for the period covered by Notification No. 45/2010-ST are exempt from service tax, and the corresponding demand cannot survive.

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