Electrical installation services not taxable under Section 65(39a) before Finance Act 2005 amendment effective 16.06.2005

CESTAT NEW DELHI held that electrical installation and wiring services were not taxable under Section 65(39a) prior to 16.06.2005. The definition of "Erection, Commissioning or Installation" was expanded through Finance Act 2005 to specifically include electrical and electronic devices, wiring, and fittings. The appellant's transmission line erection work involving PCC poles, towers, and wire drawing became taxable only from 16.06.2005 onwards. Since the appellant had already paid service tax for the post-amendment period, the demand for earlier periods was unsustainable. Appeal allowed.

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Issues involved:
The issue involves the confirmation of service tax levy on the appellant by the Commissioner (Appeals) for the period of 10.09.2004 to 15.06.2005, based on the nature of services provided by the appellant in relation to erection work for electricity companies.

Summary of Judgment:

Issue 1: Interpretation of Taxable Services Prior to 16.06.2005
The appellant contested the levy of service tax on the grounds that prior to 16.06.2005, only "Erection, Commissioning or Installation of plant, machinery, equipment" was taxable, and the inclusion of "Installation of Electrical and Electronic Devices" post this date expanded the taxable scope. The Tribunal referred to relevant definitions and previous decisions, affirming that the appellant's activities were taxable only from 16.06.2005 onwards due to the legislative amendment.

Issue 2: Applicability of Circular No.123/5/2010-TRU
The Tribunal considered Circular No.123/5/2010-TRU which clarified the scope of taxable services under "Erection, commissioning or installation services." It analyzed specific activities in dispute to determine their tax status, concluding that the appellant's services fell outside the taxable purview before 16.06.2005, as per the circular's guidelines.

Decision:
The Tribunal found that the appellant's liability to tax arose only from 16.06.2005 onwards, aligning with the amended legislative provisions regarding electrical fittings and devices. Consequently, the demand for service tax, interest, and penalty for the period in question was deemed unsustainable. As the issue was decided in favor of the appellant on merit, the consideration of the extended period was unnecessary. Therefore, the impugned order confirming the service tax levy was set aside, and the appeal was allowed in favor of the appellant.

[Separate Judgment: HON'BLE MS. BINU TAMTA , MEMBER ( JUDICIAL ) And HON'BLE MR. P.V. SUBBA RAO , MEMBER ( TECHNICAL )]

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