) M/S. West Bengal State Electricity ... vs Commissioner Of Service Tax, Kolkata

(ARISING OUT OF ORDER-IN-ORIGINAL NO.43/COMMR/ST/KOL/2009-10 DATED 21.01.2010 PASSED BY COMMISSIONER OF SERVICE TAX, KOLKATA)

FOR APPROVAL AND SIGNATURES OF

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

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 authoritative report or not ?

3. Whether Their Lordships wish to see the fair copy : of the Order? 4. Whether Order is to be circulated to the Departmental : Authorities ?

1) M/S. WEST BENGAL STATE ELECTRICITY TRANSMISSION COMPANY LTD. APPELLANT VERSUS COMMISSIONER OF SERVICE TAX, KOLKATA ...RESPONDENT

AND

2) COMMISSIONER OF SERVICE TAX, KOLKATA APPELLANT COMMISSIONER VERSUS M/S. WEST BENGAL STATE ELECTRICITY TRANSMISSION COMPANY LTD.

...RESPONDENT APPEARANCE:

DR. SAMIR CHAKRABORTY, ADVOCATE FOR THE ASSESSEE-APPELLANT;

SHRI D.K.ACHARYA, SPL. COUNSEL FOR THE REVENUE.

CORAM:

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

Date of Hearing & Decision:19.01.2015

ORDER NO.FO/A/75100-101/2015

Per Dr. D.M.Misra These two Appeals are filed by the Assessee-Appellant as well as the Revenue, challenging the Order-in-Original No.43/COMMR/ST/KOL/2009-10 dated 21.01.2010 passed by Commissioner of Service Tax, Kolkata. Since the issues involved in both the Appeals, are common, therefore, the same are taken together for disposal.

2. Briefly stated the facts are that the Assessee-Appellant, M/s. West Bengal State Electricity Transmission Company Limited (M/s. WBSETCL in short) were engaged in transmission of electricity in the State of West Bengal. M/s. West Bengal Electricity Distribution Company Limited (M/s. WBSEDCL in short), who were engaged in distribution of electricity in the State of West Bengal, received power from generating companies by utilizing the transmission network of M/s. WBSETCL. A show cause notice was issued to the Assessee-Appellant, alleging that the services rendered by them, for the period, 01.04.2007 to 31.03.2009, are classifiable under the category of Business Support Service, as defined under sub-clause (104C) of Section 65, and a taxable service under clause(zzzq) of Section 65(105) of the Finance Act, 1994. On adjudication, the ld. Commissioner dropped part of the demand of Service Tax of Rs.14,95,46,410/- and confirmed the demand of Rs.118,69,78,952/-, and imposed penalty of equal amount under Section 78 of the said Act; and penalty of Rs.5,000/- under Section 77 of the Act ibid. Aggrieved by the said Order, the Assessee-Appellant filed the present Appeal. Revenue has also filed Appeal against the same Order challenging it to the extent of the demand dropped by the ld. Commissioner.

3. At the outset, ld. Advocate, Dr Samir Chakraborty for the Appellant, submits that by virtue of Notification No.45/2010 dated 20.07.2010, the Central Government in exercise of the power conferred under Section 11C of the Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994, directed that no service tax shall be required to be paid in respect of taxable services relating to transmission and distribution of electricity for the period up to 21.06.2010. He further submits that the period in the present Appeal is covered under the period specified in the said Notification. Further, he submits that this Tribunal in the case of M.P.Power Transmission Co. Ltd. vs. CC & CE, Bhopal, 2011(24)STR 67, had allowed the Appeal filed by the Appellant-assessee therein, in view of the said Notification No.45/2010, dated 20.07.2010.

4. Ld. Special Counsel, Shri D.K.Acharya for the Revenue, even though did not dispute about the said Notification, however, referring to the judgment of the Honble Supreme Court in the case of CCE, New Delhi vs. Connaught Plaza Restaurant (P) Ltd., 2012 (286) ELT 321(SC), submitted that a Notification under Section 11C of the Central Excise Act, 1944, would not wipe out the liability of the pending proceedings against an assessee. However, on the direction of the Bench, he had referred the matter to the CBEC for necessary instruction.

5. He has fairly submitted that in its letter dated 25.08.2014, the OSD CBEC (Judicial cell ) has clarified and communicated that the observation of the Honble Supreme Court in the case of Connaught Plaza Restaurant (supra), cannot be inferred as a ruling/precedent as the subject matter was not that of exemption under Section 11C of CEA,1944 but that of classification of soft-serve as ice-cream and consequently, the Notification No.45/2010 dated 20.07.2010, would be applicable to all pending cases.

6. Heard both sides and perused the record. Undisputedly, we find that during the period in question, the Assessee-Appellant were undisputedly engaged in providing service relating to transmission and distribution of electricity. The claim of the Appellant-assessee is that by virtue of Notification No.45/2010 ST dt. 20.07.2010, no service tax is required to be paid by them for the period in dispute which is prior to 21.06.2010. The said Notification reads as:

Whereas, the Central Government is satisfied that a practice was generally prevalent regarding levy of service tax (including non-levy thereof), under section 66 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), on all taxable services relating to transmission and distribution of electricity provided by a person (hereinafter called the service provider) to any other person (hereinafter called the service receiver), and that all such services were liable to service tax under the said Finance Act, which were not being levied according to the said practice during the period up to 26th day of February, 2010 for all taxable services relating to transmission of electricity, and the period up to 21st day of June, 2010 for all taxable services relating to distribution of electricity;

Now, therefore, in exercise of the powers conferred by section 11C of the Central Excise Act, 1944 (1 of 1944), read with section 83 of the said Finance Act, the Central Government hereby directs that the service tax payable on said taxable services relating to transmission and distribution of electricity provided by the service provider to the service receiver, which was not being levied in accordance with the said practice, shall not be required to be paid in respect of the said taxable services relating to transmission and distribution of electricity during the aforesaid period.

[Notification No. 45/2010-S.T., dated 20-7-2010]

7. The said Notification has been interpreted by this Tribunal in the case of M.P.Power Transmission Co. Ltd. (supra) and later followed in the case of Noida Power Co.Ltd. Vs. Commissioner of C.Ex. Noida 2014(33) STR 383(Tri-Del.), wherein it has been held that no service tax is required to be paid for rendering services in relation to transmission and distribution of electricity during the period mentioned in the said Notification. We have no reason to disagree with the said decisions of the co-ordinate Bench of this Tribunal. Besides, in view of the clarification issued by the Board, the Appellant-assessee are eligible to the benefit of the said Notification. In the result, the impugned Order is set aside to the extent of confirming the demand against the Appellant, and the Appeal filed by the Assessee-Appellant is hereby allowed. Consequently, the Revenues Appeal being devoid of merit, is accordingly dismissed.

(Operative part of the Order was pronounced in the court.)

Sd/-19.02.2015 Sd/-19.02.2015 (I.P.LAL) (D.M.MISRA) TECHNICAL MEMBER JUDICIAL MEMBER

DUTTA/

4 ST/A/110 & 113/2010

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