Service tax exemption for construction and electricity-related maintenance services defeated the demand for the relevant period.

Service tax demand on Construction of Complex Service for the period before 01.07.2010 was not sustainable because the levy was already covered by the settled legal position for that period, so no demand survived. Demand under Management, Maintenance or Repair Service relating to non-commercial government buildings also failed because section 98 of the Finance Act, 2012 covered the relevant period, eliminating tax liability on that aspect. For the remaining electricity-related services, Notification No. 45/2010-ST read with the earlier electricity exemption notifications extended relief to services rendered in relation to transmission and distribution of electricity, so that demand also did not survive.

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Issues: (i) Whether service tax was payable on Construction of Complex Service for the period prior to 01.07.2010. (ii) Whether the demand under Management, Maintenance or Repair Service relating to defence establishments and electricity transmission or distribution activities was sustainable in view of the exemption notifications and section 98 of the Finance Act, 2012.

Issue (i): Whether service tax was payable on Construction of Complex Service for the period prior to 01.07.2010.

Analysis: The demand pertained to a period before 01.07.2010, and the issue stood covered by the settled legal position that such levy was not sustainable for that period. The demand under this category therefore did not survive.

Conclusion: The demand under Construction of Complex Service was not sustainable and was decided in favour of the assessee.

Issue (ii): Whether the demand under Management, Maintenance or Repair Service relating to defence establishments and electricity transmission or distribution activities was sustainable in view of the exemption notifications and section 98 of the Finance Act, 2012.

Analysis: Services relating to non-commercial government buildings stood covered by section 98 of the Finance Act, 2012 for the relevant period, so no demand survived on that aspect. For the remaining Management, Maintenance or Repair Service, the Tribunal held that Notification No. 45/2010-ST, read with the earlier notifications concerning transmission and distribution of electricity, extended exemption to services rendered in relation to transmission and distribution of electricity. The services in question were found to fall within that scope.

Conclusion: The demand under Management, Maintenance or Repair Service was not sustainable and was decided in favour of the assessee.

Final Conclusion: The assessee succeeded on the substantive tax disputes, while the Revenue's challenge to the exemption granted for the electricity-related services failed.

Ratio Decidendi: Where the relevant period is covered by a statutory exemption or by an exemption notification extending to services in relation to transmission and distribution of electricity, no service tax demand can be sustained on those services.

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