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of <h1>Petitioner's Defense to Be Heard; Further Proceedings Guided by Circulars & CESTAT Judgment; No Costs Awarded.</h1> <h3>M/s. Karnataka Power Transmission Corporation Limited, Versus Principal Commissioner of Central Excise, LTU, Bengaluru, Commissioner of Central Excise & Service Tax LTU (Audit), New Delhi, Central Board of Excise And Customs, Union of India, The Assistant Commissioner LTU, Bengaluru</h3> M/s. Karnataka Power Transmission Corporation Limited, Versus Principal Commissioner of Central Excise, LTU, Bengaluru, Commissioner of Central Excise & ... Issues Involved:The appeal challenges the order dismissing a writ petition, which contested a show cause notice and the constitutionality of certain provisions and notifications under the Finance Act, 1994.Challenge to Show Cause Notice and Constitutional Validity:The petitioner challenged a show cause notice and the constitutionality of Section 66E(e) of the Finance Act, 1994, along with notifications No. 20/2014 ST dated 16.9.2014 and circular No. 985/09/2014-CS dated 22.9.2014. The petitioner's contentions were partially accepted based on subsequent circulars and a judgment by the Customs, Excise and Service Tax Appellate Tribunal [CESTAT], leading to the issuance of circular No. 214/1/2023 dated 28.2.2023.Background and Facts:The petitioner, a government-owned corporation, received a show cause notice to pay service tax on penalties collected from contractors for various reasons. The petitioner argued that the amounts were not subject to service tax as they did not involve added value or a service element. The petitioner's arguments were supported by a judgment in the case of South Eastern Coalfields Ltd. and subsequent circulars issued by the Government of India.Contentions and Submissions:The appellant contended that the amounts in question were not taxable under service tax laws, citing judgments and circulars supporting their position. On the other hand, the respondents argued that the circulars relied upon by the petitioner were subsequent events and not available when the show cause notice was issued.Judicial Decision and Directions:The court noted that the contentions raised by the petitioner were considered in subsequent circulars and a CESTAT judgment. The petitioner was directed to appear before the authority, present their defense, and provide all relevant material. The authority was instructed to consider the defense in light of the circulars and conduct further proceedings before passing appropriate orders.Conclusion:The writ appeal was disposed of with directions for the petitioner to appear before the authority, present their defense, and allow for further proceedings based on the circulars and judgments mentioned. All contentions of the petitioner were left open, and no costs were awarded.
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