TMI Blog2022 (4) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... d distribution of electricity would be covered by the exemption and distribution of electricity extended under various notifications; therefore, the taxability of the related/ ancillary services are required to be given same treatment as is given to the single service, which gives such bundle its essential character, namely, transmission and distribution of electricity; moreover, one cannot think of transmission and distribution of electricity without impugned work contract services by the appellant. The learned commissioner has correctly evaluated the status of the appellants and the activities undertaken by them and concluded correctly that the exemption under Entry No 12 of Mega Exemption Notification 25/2012-ST dated 20.06.12 and Entry No 12A substituted by NN.09/2016-ST dated 01.03.2016 is not available to the appellants. However, as we find that the appellants are eligible for exemption under Serial No. 29 (h) of Notification 25/2012-ST dated 20.06.2012, the acceptability or otherwise of other claims becomes superfluous. Time Limitation - HELD THAT:- The appellants have registered themselves and they have not paid any service tax and moreover have been showing nil re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the said Act, or any other entity entrusted with such function by the Central Government or, as the case may be, by the State Government . Learned Counsel further submits that the services rendered by M/s APDCL / CAEDCL are covered under negative list of services under clause (k) of Section 66D of the Finance Act, 1994. He submits further that the appellant being a subcontractor, provided the impugned works contract services to M/s APDCL/CAEDCL for the ultimate services of transmission or distribution of electricity which is also exempt under entry Serial No. 29 clause (h) of Mega exemption Notification 25/2012-ST, dated 20.06.2012 as per which; (h) sub-contractor providing services by way of works contract, the another contractor providing works contract services which are exempt. 3. Learned Counsel for the appellants submits also that without prejudice to the above and without accepting, the appellant, for argument sake, submits that that the appellant s impugned works contract services were taxable, under the reversed charged mechanism to APDCL/ CAEDCL were also being liable to 50% service tax on impugned work contract under section 66B read with Notification 30/2012-ST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise, Bombay, 1995 (75) ELT 721 (SC). (vii) Pushpam Pharmaceuticals Company V. Collector of Central Excise, Bombay, 1995 (78) ELT 401 (SC). (viii). Aban Loyd Offshore Ltd. V. Commissioner of Customs, 2006 (200) ELT 370 (SC). 6. Learned Counsel further submits that the appellants had a bona fide belief that they were correctly availed the exemption notification. In view of the bona fide belief suppression cannot be alleged and benefits of the appellants cannot be questioned and extended period cannot be invoked. He relied upon: (i). CCE V. Vineet Electrical Industries Pvt. Ltd. 2002 (144) ELT A292. (ii). CCE V. Raptakos Brett Co. 2006 (194) ELT 101 (Tri. Mum.). (iii).CCE V. Rishabh Velveleen (P) Ltd. 199 (114) ELT 839 (Tri.) (iv). Pee Jay Apparels (P) Ltd. V. CCE 2001 (135) ELT 842 (Tri. Del.). (v).Cosmic Dye Chemical V. CCE 1995 (75) ELT 721 (SC). (vi).Ispat Industries Ltd. V. CCE 2006 (199) ELT 509 (T). (vii).NIRC Ltd. V. CCE 2007 (209) ELT 22 (T). (viii). Chemicals Fibres of India Ltd. V. CCE 1988 (33) ELT 551 (T). 7. Learned Counsel further submits that section 78 cannot be invoked as there are no sufficient grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been registered under the Companies Act, 1956 and does not carry out any function entrusted to municipality under Article 243W of Constitution of India. For that reason the services rendered by the appellant do not also covered by Serial No. 12 A of Notification 25/2012-ST. Learned AR submits that the appellant s claim that the adjudicating authority categorised them as a subcontractor is incorrect. Going by the nature of the services provided by APDCL i.e. transmission or distribution of electricity, the appellants have provided services like erection, commissioning and installation services in erection of LT lines; construction of sub-stations etc., to carry out the business of APDCL. He submits that in terms of Section 66 F(1) unless otherwise specified, reference to a service herein refer to as the main service shall not include reference but service which is used for providing main service. 10. Regarding the limitation issue learned AR submits that the appellants are registered themselves for service tax on 31.08.2009 claiming to provider of erection, commissioning and installation service and they have not paid any service tax; they have not filed any returns and hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransmission or distribution service and secondly, it is not provided by transmission or distribution utility as defined in the Act. Section 66F(1) of the Finance Ac, 1994, very specifically provides that unless otherwise specified, reference to a service( herein referred to as main service) shall not include reference to a service which is used for providing main service. This section also gives an illustration to understand this concept, which is as under; The service by RBI, being the main service within the meaning of clause (b) of Section 66D, does not include any agency service provide or agreed to be provided by any bank to RBI. Such agency service, being input service, used by RBI for providing the main service, for which the consideration by way of fee or commission or any other amount is received by the agent bank, does not get excluded from the levy of service tax by virtue of inclusion of main service in clause (b) of negative list in section 66D and hence, such service is leviable to service tax. 12. We find that the appellant has submitted that the adjudicating authority treated the appellant as a Contractor but in fact he is not a Contractor but a Sub-Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bution of electricity would be covered by the exemption and distribution of electricity extended under various notifications; therefore, the taxability of the related/ ancillary services are required to be given same treatment as is given to the single service, which gives such bundle its essential character, namely, transmission and distribution of electricity; moreover, one cannot think of transmission and distribution of electricity without impugned work contract services by the appellant. As long as the appellants are undertaking the activities in relation to the exempted services be as a contractor or a sub-contractor, the service provided by the appellant is not exigible to service tax. 14. We find that the appellant claimed that their case can be considered as bundled service to arrive at the conclusion that it is in relation to the transmission and distribution of electricity. This issue of nexus between other works and the main activity ( or say bundling of services) in relation to the transmission and distribution of Electricity was dealt by Hon ble High Court of Gujarat in the case of 2020 (34) GSTL 385 (Guj.). Hon ble Court observed that: 18 . Insofar as sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated services. The question is whether an element of provision of these services is combined with an element or elements of provision of the main service of transmission and distribution of electricity. As noticed earlier, the respondents have themselves treated such related/ancillary services as part of the main service of transmission and distribution of electricity for the pre-negative list regime. Apart, therefrom, considering this issue independently, reference may be made to certain provisions of the Electricity Act. Sections 43 and 45 of the Electricity Act, which are relevant for the present purpose, read as under :- 43. Duty to supply on request . - (1) Save as otherwise provided in this Act, every distribution licensee, shall, on an application by the owner or occupier of any premises, give supply of electricity to such premises, within one month after receipt of the application requiring such supply : Provided that where such supply requires extension of distribution mains, or commissioning of new sub-stations, the distribution licensee shall supply the electricity to such premises immediately after such extension or commissioning or within such period as m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges fixed by the distribution licensee shall be in accordance with the provisions of this Act and the regulations made in this behalf by the concerned State Commission. 21 . On a plain reading of Section 43 of the Electricity Act, it is evident that a licensee, on an application by the owner or occupier of any premises, is required to supply electricity to such premises. For the purpose of supplying electricity, it is the duty of the distribution licensee to provide electric plant or electric line for giving electric supply to the premises of the consumer. In case the distribution licensee fails to supply the electricity, it is liable to penalty under sub-section (3) of Section 43. Thus, a statutory duty has been cast upon the licensee to provide electric plant or electric line for giving electric supply to the premises of the applicant. Electric line has been defined under sub-section (20) of Section 2 of the Electricity Act to mean any line which is used for carrying electricity for any purpose and includes - (a) any support for any such line, that is to say, any structure, tower, pole or other thing in, on, by or from which any such line is, or may be, supported, carri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the services related to transmission and distribution of electricity are naturally bundled in the ordinary course of business of the petitioner and are required to be treated as provision of the single service of transmission and distribution of electricity which gives the bundle its essential character. 23 . Besides, a perusal of the GERC Regulations indicates that the services which are sought to be taxed now are the services, which the petitioner is required to mandatorily provide at the rate prescribed by GERC, a statutory authority constituted under the provisions of the Electricity Act. In the opinion of this Court, all these services are essential activities which have a direct and close nexus with transmission and distribution of electricity. In terms of the earlier clarification dated 7-12- 2010 issued vide Circular No. 131/13-2010-S.T., the Government of India had clarified that an activity, which is an essential activity having direct and close nexus with transmission and distribution of electricity would be covered by the exemption for transmission and distribution of electricity extended under the relevant notifications. Therefore, the taxability of the related/a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No 12 of Mega Exemption Notification 25/2012-ST dated 20.06.12 and Entry No 12A substituted by NN.09/2016-ST dated 01.03.2016 claiming that the services provided by them were to the Government, a local authority or a governmental authority. Learned Commissioner finds that The appellant has also challenged the proceedings for denying them the benefit of exemption under Sr. No. 12 of the Notification No. 25/2012-ST dated 20.06.2012. They have argued that M/s APDCL should be deemed as a Governmental Authority. I find that the adjudicating authority in its findings at para 16.16.1 of impugned order has held as under:- M/s Assam Power Distribution Company Limited (APDCL) is a public limited company wholly owned by the Government of Assam. It was incorporated on the 23rd day of October, 2009 and has been registered under Indian Companies Act, 1956 and it does not carry out any function entrusted to a municipality under article 243 W of the Constitution. The ultimate aim of the company is to undertaken the electricity distribution, trading, supply in the state of Assam or outside in accordance with provisions of applicable law an all activities ancillary or appurtenant thereto. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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