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2016 (3) TMI 899 - AT - Service TaxDemand of Service tax - Erection, installation and commissioning service - Appellant contracted with M/s MSETCL, which is work to be executed on turnkey basis in accordance with the composite contract comprising supply of components as well as labour - Held that:- turnkey contracts also include supply of goods necessary for execution of the projects. It is a normal practice in such a contract to provide a detailed breakup, with invoices raised to mirror the contents of the payments in the contract, for regular payments to be made to the contractor. Such a break up is a necessary input for management of the finance related to the work itself, especially when a work is executed over a longer period of time. It does not allow for vivisecting a contract. Vide Notification 45/10-ST, all taxable services rendered 'in relation to' transmission and distribution of electricity have been exempted from the purview of service tax. The expression 'relating to' is very wide in its amplitude and scope. Therefore, all taxable services rendered in relation to transmission/distribution of electricity would be eligible for the benefit of exemption under the said Notification for the period prior to 27.02.2010. Also 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. Therefore, the terms of the contract being very clear as an indivisible one, vivisection for the purpose of levying service tax on ‘erection, installation and commissioning service' is incorrect. Since the project is in relation to transmission and distribution of electricity up to 26th February 2010, the demand for service tax is not correct in law. - Decided in favour of appellant with consequential relief
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