2011 (4) TMI 1429 - AT - Service Tax

Summary

Issues involved: Service tax liability on transmission and distribution of electricity for the period from July 2003 to March 2007.

Summary:
The Appellate Tribunal CESTAT Bangalore heard two appeals filed by the assessee and the Revenue against Order-in-Original No. 06/2008-ST (Commr) dated 25.2.2008, regarding service tax liability on transmission and distribution of electricity. The adjudicating authority confirmed the demand of service tax and imposed penalties under Sections 76 and 78 of the Finance Act, 1994. The assessee appealed against the order, while the Revenue was aggrieved by the non-imposition of penalty for the period prior to 18.4.2006 under Section 76 of the Act.

The learned Counsel for the assessee relied on Notification No. 45/2010-ST dated 20.7.2010, issued by the Government of India, which exempted all taxable services related to transmission of electricity till 26-2-2010 and distribution of electricity till 21-6-2010. The notification clarified that services of transmission and distribution of electricity were not intended to be taxed under the Finance Act, 1994. Consequently, the Tribunal set aside the impugned order, allowing the assessee's appeal with consequential relief and rejecting the Revenue's appeal.

This judgment highlights the exemption provided by the government for services of transmission and distribution of electricity, leading to the setting aside of the service tax liability imposed on the assessee for the specified period.