Order Date – 22 December 2023

Parties: M/s. Kailash Devebuild India Pvt. Ltd Vs The Commissioner of Central Excise

Facts –

• The Appellant, M/s. Kailash Devebuild India Pvt. Ltd, provided the service of erection of transmission line towers during the period 2004-2011. Three show cause notices were issued to the appellant alleging that this service is exigible to service tax under the head ‘erection, commissioning and installation service’ and proposed demands of service tax along with penalties.
• The appellant claimed that service is fully exempted from service tax by Notification no. 11/2010-ST dated 27.2.2010 and for the period prior to this date, by a retrospective exemption given through Notification no. 45/2010-ST dated 20.7.2010 issued by the Government under section 11C of the Central Excise Act, 1944 made applicable to service tax matters by section 83 of the Finance Act.

Issue –

• Whether the service of erection of transmission line towers is exempted?

Order –

• The Tribunal observed that that the towers erected by the appellant were meant for transmission of electricity. The question as to whether such a service is covered as taxable services related to transmission of electricity under these notifications has been decided by this Tribunal in favour of the assessee in the case of KEC International vs. Commissioner, Gurgaon.
• Thus, the question is no longer res integra and it has been the consistent view in several precedent decisions that the expression ‘services relating to transmission of electricity’ in the two notifications has a wide ambit and includes the services of installation of transmission towers for electricity and no service tax is payable.
• Consequently, the penalties imposed under sections 76, 77 and 78 of the Finance Act also cannot be sustained. The appeal is allowed.