M/S.Power Network Engineers Pvt.Ltd vs Commissioner Of Central Excise, ...

Stay Petition NO.SP-70742/13 & Appeal No.ST-70735/13 (Arising out of Order-in-Original No.28/COMMR/ST/GHY/12-13 dated 22.03.2013 passed by the Commissioner of Central Excise & Service Tax, Guwhati.)

FOR APPROVAL AND SIGNATURE

HONBLE DR. D.M. MISRA, MEMBER(JUDICIAL) HONBLE DR. I.P. LAL, MEMBER(TECHNICAL)

1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the CESTAT(Procedure) Rules, 1982 for publication in any Authorative report or not?

3. Whether Their Lordship wishes to see the fair copy of the Order?

4. Whether Order is to be circulated to the Departmental Authorities?

M/s.Power Network Engineers Pvt.Ltd. Applicant (s)/Appellant (s) Vs.

Commissioner of Central Excise, Guwahati Respondent (s)

Appearance:

Shri Devraj Sahu, Adv. for the Appellant (s)

Shri S.Sharma, Commr.(AR) for the Respondent (s)

CORAM:

Honble Dr. D.M. Misra, Member(Judicial) Honble Dr. I.P. Lal, Member(Technical)

Date of Hearing:- 20.7.2015 Date of Pronouncement :- 20.7.2015

ORDER NO.FO/A/75407/2015

Per Dr. D.M. Misra.

1. This is an application seeking waiver of pre-deposit of service tax of Rs.94.43 Lakhs and penalty of Rs.92.72 Lakhs imposed under section 78 of the Finance Act, 1994.

2. At the outset Shri Devraj Sahu, ld.Adv. for the applicant submits that the applicant are engaged in providing service under the category of erection, commissioning, or installation services and Works Contract of Service for transmission of electricity, exclusively, to Assam State Electricity Board during the period Oct. 2005 to Sep.2010. He has submitted that the activity carried out by the appellant was erection and installation of electricity towers, sub-stations etc. for efficient transmission of electricity. The present demand is confirmed for the period October, 2005 to September, 2010 under the category of erection, commissioning or installation services and Works contract Service for the period from June 2007 to Sep.2010. He submits that transmission and distribution of electricity has been exempted retrospectively from the scope of service tax by issuance of Notification No.45/2010-ST dated 20.7.2010 for the period up to 26.2.2010 relating to transmission of electricity and upto 21.6.2010 relating to distribution of electricity. Further, he has submitted that by virtue of Notification No.11/2010-ST dated 27.2.2010 transmission of electricity has been exempted prospectively. He submits that this Tribunal in the case of A.K.Das Associates Ltd. v. CCE, C & ST, BBSR-I vide order No.FO/A/75099/2015 dated 19.1.2015 after referring to the aforesaid Notifications decided the issue in favour of the assessee. He has submitted that their services relate to transmission of electricity.

3. Per contra, the ld.AR for the Revenue submits that the period involved in the present case is from October, 2005 to September, 2010. Exemption Notification No.45/2010-ST dated 20.7.2010 covers the period up to 21.6.2010 which relates to distribution of electricity. Thereafter the distribution of electricity is governed by Notification No.32/2010 dated 22.6.2010. It is his submission that the applicability of the said notification needs to be verified for the period after 22.6.2010 to September, 2010 by the adjudicating authority, as the Applicant could have rendered the services which relate to distribution of electricity also.

4. After hearing both sides for some time we find that the appeal itself could be disposed of at this stage. Accordingly, after waiving the requirement of pre-deposit, we take up the appeal for disposal with the consent of both sides.

5. We find that the appellant had now claimed before this forum that the services under the category of erection, commissioning or installation services and works contract services on which demand has been confirmed by the adjudicating authority relate to transmission of electricity during the relevant period i.e. October, 2005 to September, 2010. Appearing for the Revenue, the ld.AR does not dispute that by virtue of exemption Notification No.45/2010 dated 20.7.2010 transmission of electricity is exempted till 26th day of February, 2010 and distribution of electricity till 21.6.2010. Thereafter, transmission of electricity became exempted vide Notification No.11/2010-ST dated 27.2.2010 and distribution of electricity was exempted vide Notification No.32/2010-ST dt.22.6.2010. It is his contention that after 22.6.2010, it needs to be verified whether the appellant are eligible to the Notification No.32/2010-ST dated 22.6.2010 for rendering services relating to distribution of electricity. Both sides agree that for this limited purpose to ascertain the eligibility to the benefit of exemption Notification No.32/2010 dated 22.6.2010 for the period from 22.6.2010 till September, 2010, in the event the service related to distribution of electricity for the said period, it needs to be verified/scrutinized by the adjudicating authority. Consequently, to this extent the matter is remanded to the ld.Commissioner for deciding the same on merit. We are of the view that since the issue involved is one of interpretation of law and major period of the demand is covered by the retrospective exemption, no penalty is liable to be imposed, in the event the exemption Notification is found to be not admissible for the period 22.6.2010 to September, 2010. Needless to mention, a reasonable opportunity of hearing be granted to the appellant. The appellant is at liberty to file their submission before the adjudicating authority. Appeal allowed by way of remand. Stay petition disposed of.

(Pronounced and dictated in the open court.)

SD/ SD/

(I.P.LAL) (D.M.MISRA) MEMBER(TECHNICAL) MEMBER(JUDICIAL) sm

4 Appeal No. ST-70735/13