Back
CUSTOM EXCISE & SERVICE TAX APPELLATE TRIBUNAL, MADRAS
MS. JYOTI BALASUNDARAM, M. VEERAIYAN, JJ.
RRB Energy Ltd. -Appellant
Versus
Commissioner of Service Tax, Chennai -Respondent
Stay Order Nos. 784-785/2011 Application Nos. ST/S/134-135/2011 Appeal No. ST/202-203/2011
Decided On : 13-10-2011
K.S. Venkatagiri,V.V. Hariharan
Ms. Jyoti Balasundaram, Vice-President - The total demand of Rs. 21,38,00,000/- (approx.) confirmed against the assessees vide the impugned order can be broken up into the following five heads :—
| S. No. | Description of charges | Period | Demand (in crores) |
| 1. | Civil Work such as, foundation, control room, etc., and electrical work such as, earthing station, transformer, etc., including material supplies | 10-9-2004 to 31-3-2006 | 3.46 |
| 2. | Erection Charges | 1-4-2008 to 31-3-2009 | 3.25 |
| 3. | TNEB Infrastructure Charges | 10-9-2004 to 31-3-2009 | 7.63 |
| 4. | Land Development Charges | 10-9-2004 to 31-3-2009 | 2.33 |
| 5. | Ineligible Credit | 1-10-2006 to 31-3-2008 | 4.71 |
The appellants do not contest the last demand at S. No. 5 above, arising as result of disallowing credit and have, in fact, paid Rs. 4.71 crores. The challenge in these applications is only to the demands arising out of the first 4 headings from S. No. 1 to S. No. 4 referred to above.
2. We have heard both sides.
3.1 As regards the demand at S. No. 1, the learned counsel for the assessees submits that the demand is barred by limitation. During the relevant period, the legal position as reflected in orders of the Tribunal, was to the effect that service tax could not be demanded on Works Contract which at that time was held to be not vivisectable. The assessees are prima facie correct in contending that they were under a bona fide belief that Works Contract was not liable to tax in the light of the decisions of the Tribunal for example, as in the case of Daelim Industrial Co. Ltd. v. CCE
3.2 As regards the demand at S. No. 2 hereinabove, we find that the service tax of Rs. 3.25 crores (approx.) has already been paid out of Rs. 3.64 crores confirmed [the Commissioner has examined the claim of abatement and rejected it on the ground of certain discrepancy]. However, taking into account those discrepancies only an amount of Rs. 4 lakhs can be said not to have been paid by the assessee. We, therefore, waive pre-deposit of the demand at S. No. 2 above.
3.3 As regards the demand at S. No. 3 hereinabove, we find that as per the Electricity Act, 2002, it is the responsibility of the generating company to establish transmission lines, sub-station, etc., and the wind mill operator is required to pay Infrastructure Development charges to the Electricity Board towards strengthening the power evacuation capability and connectivity to the power handling system of Electricity Board. These charges are paid on behalf of their clients by the assessees to the Tamil Nadu Electricity Board and, therefore, the assessee have made out a prima facie case for waiver.
3.4 Regarding the demand at S. No. 4 above, we find that the assessees have made out a strong prima facie case on the ground that the demand was raised for tax under a particular category, while the impugned order demands tax in another category, which was not the case made out in the show cause notice. We, therefore, waive pre-deposit of the demand on Land Development Charges.
4. Out of the demand of Rs. 16 crores (approx.) [out of the total confirmed demand of Rs. 21 crores (approx.), Rs. 4.71 crores is not disputed and does not form the subject matter of these appeals]. We have already taken prima facie view that demand of about Rs. 3.25 crores stands paid and the balance is not sustainable.
5. In the light of the above discussion, the assessees have made out a prima facie case for unconditional waiver and hence we dispense with pre-deposit of the tax, interest and penalty and stay recovery thereof during the pendency of these appeals.
