The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the Goods Transport Agent (GTA) services were availed for the transport of Line materials and Tower parts which are related to the transmission of electricity are eligible for the benefit of the exemption Notification.
Tamilnadu Electricity Board, the appellant assessee was engaged in the manufacture of Line materials and Tower parts which are transported to various distribution circles of Tamil Nadu Electricity Board (TNEB), Mettur by engaging the transport services of two contractors viz., Natarajan and Annai Enterprises.
The assessee appealed against the order passed by the Commissioner of Customs and Central Excise (Appeals) for confirming the demand for Service Tax along with interest and also imposing the penalties.
Manoj Niranjan, the counsel for the assessee contended that the entire amount of Service Tax demanded has already been paid and as such there was no merit in the impugned order and as a distribution and transmission utility, they are exempted from paying Service Tax concerning related services in terms of the exemption Notification No. 11/2010-ST.
Harendra Singh Pal, the counsel for the department contended that the assessee was liable for payment of Service Tax in terms of Section 65(50b) of the Finance Act, 1994 read with Rule 2(1)(d)(v) of Service Tax Rules, 1994.
The Bench observed that in the case of Paschimanchal Vidyut Vitran Nigam Ltd. Vs. Commissioner of Central Excise, the court held that any activity or service like erection, commissioning and installation of meters as well as technical testing and analysis can easily be termed as services relating to the transmission and distribution of electricity.
The two-member bench comprising P Dinesha (Judicial) and Vasa Seshagiri Rao (Technical) held that the GTA Services were availed for transport of Line materials and Tower parts which are related to transmission of electricity are eligible for the benefit of the exemption Notification No. 11/2010-Service Tax.
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