TaxTMI 
TaxTMI 
2022 (4) TMI 135
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....om the perusal of the copy of the works order, it is evident that the same are works contract services in relation to distribution or transmission of electricity; M/s APDL and CAEDCL are owned by Government of Assam and both are incorporated on 23.10.2003. He submits that Section 65 B(23) of Finance Act, 1994 read with clause 67 of Section 2 of the Electricity Act, 2003 shows "electricity transmission or distribution utility" means the Central Electricity Authority; A State Electricity Board: the Central Transmission Utility or a State Transmission Utility notified under the Electricity Act, 2003 (36 of 2003); or a distribution or transmission licensee under the said Act, or any other entity entrusted with such function by the Central Government or, as the case may be, by the State Government". Learned Counsel further submits that the services rendered by M/s APDCL / CAEDCL are covered under negative list of services under clause (k) of Section 66D of the Finance Act, 1994. He submits further that the appellant being a subcontractor, provided the impugned works contract services to M/s APDCL/CAEDCL for the ultimate services of "transmission or distribution of electricity" which is ....
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....acts with intent to evade the payment of duty. He relied upon the following case laws: (i). Collector of Central Excise, Hyderabad V. Chemphar Drugs and Liniments, 1989 (40) ELT 276 (SC). (ii).Padmini Products V. Collector of Central Excise, Bangalore, 1989 (43) ELT 195 (SC). (iii). Gopal Zarda Udyog V. Commissioner of Central Excise, New Delhi, 2005 (188) ELT 251 (SC). (iv). Anand Nishikawa Co. Ltd. V. Commissioner of Central Excise, Meerut, 2005 (188) ELT 149 (SC). (v). Lubri-Chem Industries Ltd. V. Collector of Central Excise, Bombay, 1994 (73) ELT 257 (SC). (vi). Cosmic Dye Chemical V. Collector of Central Excise, Bombay, 1995 (75) ELT 721 (SC). (vii) Pushpam Pharmaceuticals Company V. Collector of Central Excise, Bombay, 1995 (78) ELT 401 (SC). (viii). Aban Loyd Offshore Ltd. V. Commissioner of Customs, 2006 (200) ELT 370 (SC). 6. Learned Counsel further submits that the appellants had a bona fide belief that they were correctly availed the exemption notification. In view of the bona fide belief suppression cannot be alleged and benefits of the appellants cannot be questioned and extended period cannot be invoked. He relied upon: (i). CCE V. Vineet Electrica....
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....nt Authority as under the said Notification. Government Authority means an authority to evolve or any other body; (i) set up by the Act of Parliament or State Legislature or; (ii) established by Government with 90% or more participation by way of equity are control, to carry out any function entrusted to municipality under Article 243 of Constitution of India. 9. Services carried out by M/s APDCL do not fall under the above list as they are public limited company wholly owned by Government of Assam which was incorporated on 23rd October, 2009 and has been registered under the Companies Act, 1956 and does not carry out any function entrusted to municipality under Article 243W of Constitution of India. For that reason the services rendered by the appellant do not also covered by Serial No. 12 A of Notification 25/2012-ST. Learned AR submits that the appellant's claim that the adjudicating authority categorised them as a subcontractor is incorrect. Going by the nature of the services provided by APDCL i.e. transmission or distribution of electricity, the appellants have provided services like erection, commissioning and installation services in erection of LT lines; construction o....
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....re exempt, shall also be exempted. That means if the sub- contractor are helping the main contractors in providing exempted services falling under works contract services, they are also exempted from service tax. Such exemption should also be considered for this service. * Now in the services of Construction and shifting/ Erection/ Testing/ Charging/ Commissioning of 11KV Line and 63 KVA S/S including augmentation etc. provided by M/s Kusum Enterprises to APDCL, components mentioned in Sec. 66D(k) are not available. Such construction is not a transmission or distribution service and secondly, it is not provided by transmission or distribution utility as defined in the Act. Section 66F(1) of the Finance Ac, 1994, very specifically provides that unless otherwise specified, reference to a service( herein referred to as main service) shall not include reference to a service which is used for providing main service. This section also gives an illustration to understand this concept, which is as under; "The service by RBI, being the main service within the meaning of clause (b) of Section 66D, does not include any agency service provide or agreed to be provided by any bank to RBI. Su....
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....to produce unintended results in derogation of the plain language employed therein". 13. We find that there is force in the contention of the appellants that the Transmission and Distribution of Electricity" in the hands of "APDCL/CAEDCL vis-a vis such specific customers" is covered under negative list u/s 66D (k) being naturally bundled as per provisions of section 66F (3) of the Finance Act 1994.; all these impugned works contract activities of appellant are essential activities having direct and close nexus with transmission and distribution of electricity would be covered by the exemption and distribution of electricity extended under various notifications; therefore, the taxability of the related/ ancillary services are required to be given same treatment as is given to the single service, which gives such bundle its essential character, namely, transmission and distribution of electricity; moreover, one cannot think of transmission and distribution of electricity without impugned work contract services by the appellant. As long as the appellants are undertaking the activities in relation to the exempted services be as a contractor or a sub-contractor, the service provided by....
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....rvices. 20. The facts of this case are required to be examined in the light of the above statutory provisions. In this case, we are concerned with transmission and distribution of electricity being the main services and application fee for releasing the connection for electricity; rental charges against metering equipment; testing fee for meters/transformers, capacitors etc.; labour charges from customers for shifting of meters or shifting of service lines; charges for duplicate bills provided by DISCOMS to consumers being related services. The question is whether an element of provision of these services is combined with an element or elements of provision of the main service of transmission and distribution of electricity. As noticed earlier, the respondents have themselves treated such related/ancillary services as part of the main service of transmission and distribution of electricity for the pre-negative list regime. Apart, therefrom, considering this issue independently, reference may be made to certain provisions of the Electricity Act. Sections 43 and 45 of the Electricity Act, which are relevant for the present purpose, read as under :- "43. Duty to supply on request.....
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....ibution licensee may include - (a) a fixed charge in addition to the charge for the actual electricity supplied; (b) a rent or other charges in respect of any electric meter or electrical plant provided by the distribution licensee. (4) Subject to the provisions of section 62, in fixing charges under this section a distribution licensee shall not show undue preference to any person or class of persons or discrimination against any person or class of persons. (5) The charges fixed by the distribution licensee shall be in accordance with the provisions of this Act and the regulations made in this behalf by the concerned State Commission." 21. On a plain reading of Section 43 of the Electricity Act, it is evident that a licensee, on an application by the owner or occupier of any premises, is required to supply electricity to such premises. For the purpose of supplying electricity, it is the duty of the distribution licensee to provide electric plant or electric line for giving electric supply to the premises of the consumer. In case the distribution licensee fails to supply the electricity, it is liable to penalty under sub-section (3) of Section 43. Thus, a statutory duty h....
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.... charges collected in respect of electricity meters are concerned, by the circular dated 7th December, 2010, the Government of India has clarified that supply of electricity meters for hire to the consumers is an essential activity having direct and close nexus with transmission and distribution of electricity and therefore, is covered by the exemption for transmission and distribution of electricity extended under the relevant notifications. Evidently therefore, all the services related to transmission and distribution of electricity are naturally bundled in the ordinary course of business of the petitioner and are required to be treated as provision of the single service of transmission and distribution of electricity which gives the bundle its essential character. 23. Besides, a perusal of the GERC Regulations indicates that the services which are sought to be taxed now are the services, which the petitioner is required to mandatorily provide at the rate prescribed by GERC, a statutory authority constituted under the provisions of the Electricity Act. In the opinion of this Court, all these services are essential activities which have a direct and close nexus with transmission....
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....ntemplated under sub-section (3) of Section 66F of the Finance Act, and would have to be treated in the same manner as the service which gives the bundle its essential character, namely, transmission and distribution of electricity and, would therefore, be exempt from payment of service tax. In view of the above, we are inclined to accept the contentions of the appellant in this regard. 15. We find that the appellants also claimed benefit under Entry No 12 of Mega Exemption Notification 25/2012-ST dated 20.06.12 and Entry No 12A substituted by NN.09/2016-ST dated 01.03.2016 claiming that the services provided by them were to the Government, a local authority or a governmental authority. Learned Commissioner finds that The appellant has also challenged the proceedings for denying them the benefit of exemption under Sr. No. 12 of the Notification No. 25/2012-ST dated 20.06.2012. They have argued that M/s APDCL should be deemed as a Governmental Authority. I find that the adjudicating authority in its findings at para 16.16.1 of impugned order has held as under:- "M/s Assam Power Distribution Company Limited (APDCL) is a public limited company wholly owned by the Government of A....