Erection and installation services for electricity transmission lines exempt from service tax under Notification 45/2010

The CESTAT Ahmedabad upheld exemption from service tax for erection, commissioning and installation services related to electricity transmission lines. The respondent's contract with GETCO involved transmission line work, which qualified for exemption under Notification No. 45/2010-S.T. dated 20-7-2010. This notification exempted service tax on transmission and distribution of electricity services under the erection, commissioning or installation category. The Tribunal relied on precedent from KEDAR CONSTRUCTIONS case and noted the issue was no longer res integra, having been decided favorably for service providers in multiple cases. The Department's appeal was dismissed.

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Issues Involved:
1. Eligibility for Service Tax Exemption
2. Applicability of Board Circular No. 123/5/2010-TRU
3. Interpretation of Turnkey Contract
4. Relevance of Previous Judgments and Notifications

Summary:

1. Eligibility for Service Tax Exemption:
The respondent, M/s. Adani Enterprises Ltd., filed a refund claim of Rs. 95,35,833/- u/s 11B of the Central Excise Act, 1994 read with Section 83 of the Finance Act, 1994, arguing that their services were exempt from service tax as per Board Circular No. 123/5/2010-TRU dated 24.05.2010. The adjudicating authority initially rejected the refund claim, but the Appellate Authority allowed the appeal, leading to the present appeal by the Revenue.

2. Applicability of Board Circular No. 123/5/2010-TRU:
The Revenue contended that the services provided by the respondent did not qualify for exemption under the said circular, as the activities undertaken were beyond those specified in the circular. The respondent argued that their activities fell under the exempted categories of "Laying of cables under or alongside roads" and "Laying of electric cables between grids/sub-stations/transformer stations en route."

3. Interpretation of Turnkey Contract:
The respondent's contract with M/s. Gujarat Energy Transmission Corporation Ltd. (GETCO) was on a turnkey basis, with a lump sum value segregated into various activities. The Revenue argued that this segregation implied separate contracts for different activities, which were taxable. The respondent maintained that the turnkey nature of the contract meant it should be considered as a whole, exempt from service tax.

4. Relevance of Previous Judgments and Notifications:
The respondent cited several judgments, including Hazirabaug Mining and Engineering Pvt. Ltd. Vs. C.C.Ex, and notifications like Notification No. 11/2010 - Service tax dated 27.02.2010, to support their claim for exemption. The Tribunal referred to these precedents and the Notification No. 45/2010-S.T., which exempts services related to the transmission and distribution of electricity from service tax.

Conclusion:
The Tribunal upheld the Appellate Authority's decision, finding that the respondent's activities were covered under the exempted categories specified in the Board Circular No. 123/5/2010-TRU and Notification No. 45/2010-S.T. Consequently, the appeal filed by the Department was dismissed, and the impugned order was upheld.

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