Custom, Excise & Service Tax Tribunal
Karnataka Power Transmission ... vs Commissioner Of Central Excise, ... on 30 March, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Application(s) Involved: ST/Stay/27265/2013 in ST/26929/2013-DB ST/Stay/28532/2013 in ST/27938/2013-DB Appeal(s) Involved: ST/26929/2013-DB, ST/27938/2013-DB [Arising out of Order-in-Appeal No. 104/2013 dated 01/05/2013 passed by the Commissioner of Central Excise and Service Tax, LTU Bangalore] [Arising out of Order-in-Appeal No. 173/2013 dated 23/07/2013 passed by the Commissioner of Central Excise and Service Tax, LTU Bangalore] For approval and signature: HON'BLE Mrs. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE Mr. B.S.V. MURTHY, 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? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Karnataka Power Transmission Corporation Limited (KPTCL), 7th Floor, Kaveri Bhavan Bangalore 560 009 Karnataka Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax Bangalore-LTU 100 Ft Ring Road JSS Towers, Banashankari-III Stage, Bangalore 560 085 Karnataka Respondent(s)
Appearance:
Mr. Raghuraman, Advocate & Mr. J.S. Bhanumurthy, CA 32, 1st Floor, Patalamma Temple Street, Near South End Circle, Basavangudi, Bangalore - 560 004 Karnataka For the Appellant Mr. R. Gurunathan & Mr. N. Jagdish, AR For the Respondent Date of Hearing: 30/03/2015 Date of Decision: 30/03/2015 CORAM:
HON'BLE Mrs. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE Mr. B.S.V. MURTHY, TECHNICAL MEMBER Stay Order No. 20796 / 2015 Final Order No. 21023 / 2015 Per: B.S.V. MURTHY In Appeal No. ST/26929/2013 service tax of Rs. 24,05,834/- (Rupees Twenty Four Lakhs Five Thousand Eight Hundred and Thirty Four only) with interest has been demanded and penalty equal to the tax demanded has been imposed on the appellant. Period involved is May 2006 to March 2011 and in Appeal No. ST/27938/2013, the demand for service tax is of Rs. 1,68,568/- (Rupees One Lakh Sixty Eight Thousand Five Hundred and Sixty Eight only) with interest for the period from April 2011 to March 2012. In both the cases penalties have been imposed.
2. Appellant is engaged in the activity of transmission of electricity from Power Generating Companies to the Power Distribution Companies.
3. The issue involved is whether the appellant is required to pay service tax on the last recovery by them from the customers for sharing the facility of INSAT space segment utilization for the purpose of transmission availability of load and distribution. The appellants availed the facility of INSAT by an agreement with M/s. Antrix Corporation Pvt. Ltd. and thereafter a portion of the expenditure incurred by them was shared with Power Generating Companies. On this amount collected from the customers, Revenue has taken a view that appellant should pay service tax under the category of Business Support Service.
4. After hearing both the sides, we consider that the claim made by the learned counsel that prima facie appellant is entitled to stay in view of the fact that the services are relatable to power distribution and transmission activities. According to Notification No. 45/2010-ST dated 20.07.2010 and Notification No. 11/2010-ST dated 27.02.2010, for the entire period covered by this proceedings, service tax is not payable in respect of the services rendered in relation to transmission and distribution of power. KPTCL is mainly engaged in transmission of power from the Power Generating Companies to Distribution Companies and therefore the centralized services availed by them and shared with the customers has to be necessarily considered as a service in relation to transmission and distribution of electricity. We find that appellant has made out a strong prima facie case in their favour. Accordingly the requirement of pre-deposit is waived and stay against recovery is granted during the pendency of appeal.
5. In the case of Appeal No. ST/27938/2013, the appeal has been dismissed by the learned Commissioner (Appeals) because his order directing the appellant to deposit the entire amount of tax demanded was not complied with. In view of the stand taken by us that for the earlier period, unconditional waiver of pre-deposit and stay can be granted, we consider that it would not be appropriate to direct the appellant to deposit any amount while remanding the matter to Commissioner (Appeals) to hear the case on merits. Therefore the impugned order involved in Appeal No. ST/27938/2013 is set aside and the matter is remanded to the learned Commissioner (Appeals) with a direction to decide the matter on merits without insisting on any pre-deposit.
6. In the result in the case of Appeal No. ST/26929/2013, unconditional waiver of pre-deposit is allowed and stay against recovery is granted during the pendency of appeal and in respect of Appeal No. ST/27938/2013, the matter is remanded to the learned Commissioner (Appeals) to decide the appeal on merits without insisting on any pre-deposit. Both the stay applications and appeals get disposed of in above terms.
(Order pronounced in open court) (B.S.V. MURTHY) TECHNICAL MEMBER (ARCHANA WADHWA) JUDICIAL MEMBER iss