Works Contract & Maintenance Services provided to NEEPCO for Power Generation Exempt from Service Tax: CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Kolkata held that works contract and maintenance-related services provided to North Eastern Electric Power Corporation Limited (NEEPCO) are exempted from service tax.

M/s. Amal Debnath filed an appeal before the Tribunal challenging the service tax demand raised for the period 2010-11 to 2013-14.

The appellant submitted that the Department initiated proceedings based on intelligence gathered from Form 26AS data received from the Income TaxDepartment.

It was alleged that the appellant had received consideration for providing taxable services but had not discharged the appropriate Service Tax liability.

The Department found that although the appellant had obtained registration under categories such as manpower recruitment/supply agency service, supply of tangible goods service, and cleaning service.

It was also found that the appellant was also engaged in providing multiple services including management, maintenance or repair, works contract, site formation and clearance, rent-a-cab, and other allied services to NEEPCO, without paying Service Tax on those receipts.

Therefore, the department issued a show cause notice dated 22.04.2016 invoking the extended period of limitation, demanding recovery of tax along with interest and penalties.

Before the tribunal, the appellant argued that all the services were provided to NEEPCO, which is a Central PSU engaged in generation and transmission of electricity in the North-Eastern region, and therefore the services were covered under the exemption provided by Notification No. 11/2010-ST dated 27.02.2010 and Notification No. 25/2012-ST dated 20.06.2012.

The appellant further noted the Tribunal's earlier decision in Dhar Brothers Construction Company Pvt. Ltd., which ruled that similar services related to the distribution and transmission of electricity were not subject to service tax.

The bench of Ashok Jindal (Judicial member) and K. Anpazhakan (Technical member) observed that it was not disputed that the appellant had provided the services to NEEPCO and that NEEPCO was engaged in generation and transmission of electricity.

The tribunal, noting the decision in Dhar Brothers Construction Company Pvt. Ltd., held that the services provided in relation to electricity generation/transmission were exempt during the entire relevant period under the applicable notifications.

The order was set aside accordingly.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates