The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that service tax is not leviable on service for transmission of electricity by Gujarat Energy Transmission Corporation Limited (GETCO).
The appellant was served two show cause notices dated 20.10.2014 and 10.04.2015 for the period 2009-10 to 2012-13 and 2013-14 respectively demanding service tax on various charges recovered by the appellant from the consumers for the erection of Bays, Sub-stations and Transmission Lines under the category of Erection, Commissioning and Installation Service under Section 65 (zzd) of the Finance Act, 1994 and further service tax to the extent of 50% under reverse charge on work contract service received by the appellant.
Further, show cause notice also demanded interest on Cenvat credit which was never utilised by the appellant. After considering the reply submitted by the appellant, learned Commissioner by two orders-in-original confirmed the said show cause notices against which the present two appeals are preferred by the appellant.
The counsel appearing on behalf of the appellant submitted that all the services provided by the appellant are in relation to transmission of electricity accordingly the same is exempted vide Notification No. 45/2010-ST dated 20.07.2010 for the period up to 27.02.2010 and for the period from 27.02.2010 vide Notification No. 11/2010-ST dated 27.02.2010 and the same services are not taxable from 01.07.2012 in view of the negative list of services under Section 66D of Finance Act, 1994.
It was submitted that in the present case since the taking of the credit and its reversal clearly reflected in the record, suppression of facts or wilful mis-statement with an intention to evade payment of duty cannot be alleged and hence longer period of limitation is not applicable and therefore, demand of interest must fall.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “It can be seen that the entire period in the present appeal i.e. related to Notification No. 45/2010-ST, 11/2010-ST and also for the period when negative list under Section 66D was in force, it was held that service for transmission of electricity is not leviable to service tax. Therefore, the issue is no longer res-integra. Accordingly, in the present case also the service tax liability in respect of Erection, Commissioning and Installation Service is not sustainable.”
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