The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observed that Transmission of electricity is exempt from service tax.
A transformer manufacturing company, the appellant, has filed Rs 7, 27,884 refund claim for service tax from February 27 to June 30, 2010, related to the installation of electricity transmission equipment. Despite being duly registered, the Finance Act, 1994, and Notification No. 11/2010-ST exemption, the department raised objections, requiring specific documents. The appellant submitted GAR-7 copies, a work order agreement, running invoices, and a PSEB certificate. Notably, they declared the refund as recovery in their balance sheet. The case awaits the department’s response, shedding light on complexities in service tax refund claims.
The legal counsel for the appellant Naveen Bindal argued against the rejection of a service tax refund, asserting that the order lacked legal basis as authorities had failed to consider evidence properly. The department contended that the work pre-dated 27.02.2010, denying benefits under the 27.02.2010 notification. The counsel cited Government Notification 45/2010 (20.07.2010), which had exempted services even pre-27.02.2010 under Section 11C of the Central Excise Act, 1944. The appellant’s timely claim on 07.12.2010 fell within the six-month limit. However, the Commissioner (Appeals) rejected, claiming the notification only applied to non-levied service tax cases.
The counsel for the Respondent Raman Mittal Maintained the appellant’s ineligibility for Notification No. 11/2010-ST and Notification No. 45/2010-ST benefits. The Commissioner (Appeals) concurred. Yet, a detailed review revealed the appellant substantiated the Rs. 7, 27,884 service tax payment for April to June 2010. Noteworthy is Notification No. 11/2010-ST’s service tax exemption for electricity transmission services. Despite providing requested documents, the original authority erroneously concluded the appellant failed to prove if the service tax was for post-notification services. This highlights the intricacies of evidence interpretation in service tax disputes.
Both authorities inaccurately assumed the burden of duty had been passed to customers without reviewing the appellant’s invoices, which notably lacked a service tax charge. The appellant consistently paid service tax on the gross value from the government undertaking, PSEB, in accordance with the work order terms. This challenged the authorities’ conclusions, stressing the importance of a meticulous examination of documentation in the concluded service tax dispute.
The single bench of the tribunal comprising S.S. Garg member (Judicial) concluded that remanding this case to the original authority for a comprehensive reevaluation of the appellant’s refund application.
It was noted that, “The original authority should thoroughly assess the impact of the notifications cited by the appellant, along with the various documents submitted, and issue a new order in adherence to legal principles.”
“Furthermore, I instruct the adjudicating authority to conclude the reevaluation within two months from the receipt of a certified copy of this order”, the bench added.
Appeal was accordingly allowed by way of remand.
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