IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, CHENNAI Service Tax Appeal No. 40323 of 2017 (Arising out of Order in Original No. CBE/ST/2016-Commr. dated 18.11.2016 passed by the Commissioner of Central Excise, Customs and Service Tax, Coimbatore)

Tamil Nadu Transmission Corporation Ltd. Appellant General Construction Circle 182, Dr. Subbarayan Road Tatabad, Gandhipuram Coimbatore – 641 012.

Vs.

Commissioner of GST & Central Excise Respondent

6/7, ATD Street, Race Course Road Coimbatore – 641 018.

APPEARANCE:

Shri V. Ravindran, Advocate for the Appellant Shri Sanjay Kakkar, Authorised Representative for the Respondent CORAM Hon’ble Shri M. Ajit Kumar, Member (Technical)

Hon’ble Shri Ajayan T.V., Member (Judicial)

FINAL ORDER NO. 40412/2026 Date of Hearing: 19.11.2025 Date of Decision: 24.03.2026 Per M. Ajit Kumar, This appeal challenges Order-in-Original (OIO) No.

CBE/ST/2016-Commr. dated 18.11.2016 (impugned order), passed by the Commissioner of Central Excise, Customs and Service Tax, Coimbatore.

2. Brief facts are that intelligence received by the department indicated that the appellant had received services relating to erection, commissioning, installation and dismantling of transmission towers, lines and substations, as well as construction and allied works at substations, through contractors registered with TNEB (Works Contract Service). The appellant had also hired motor vehicles for official use (Rent-a-Cab Service) and engaged labour on a man-day basis for handling movement of men and materials and for safeguarding offices, stores and vehicles (Supply of Manpower Service). These activities were attracting service tax under the reverse charge mechanism with effect from 01.07.2012 in terms of section 68(2) of the Finance Act, 1994 read with Notification No. 30/2012-ST dated 20.06.2012. As service tax was not paid, a letter dated 24.06.2013 was issued seeking details, followed by a summons dated 10.12.2013. In response, the appellant’s authorised officer appeared on 03.01.2014 and admitted non-registration and non-payment of service tax. Consequently, a show cause notice (SCN), dated 17.07.2015 was issued proposing recovery of duty with interest and penalties under sections 76, 77 and 78. The Adjudicating Authority confirmed the demand with interest, appropriated the tax paid, and imposed penalties, leading to the present appeal.

3. The Ld. Advocate Shri V. Ravindran appeared for the appellant and Ld. Authorized Representative Shri Sanjay Kakkar appeared for the respondent.

3.1 Shri V. Ravindran Ld. Counsel for the appellant, submitted a Table giving a snap shot of the dispute, which is reproduced below:

TABLE He submitted that:

A. The appellant is a 100% Government of Tamil Nadu–owned PSU, constituted under Section 131 of the Electricity Act, 2003, functioning as a State Transmission Utility exclusively engaged in transmission of electricity.

B. Taxes on consumption or sale of electricity fall under Entry 53 of List II of the Seventh Schedule to the Constitution, within the exclusive legislative domain of States under Article 246(2). Consistent with this constitutional position, services relating to transmission and distribution of electricity were exempt from service tax prior to 01.07.2012 under Notifications 11/2010-ST and 32/2010-ST, with retrospective protection granted by Notification 45/2010-ST.

C. With effect from 01.07.2012, transmission and distribution of electricity by an electricity utility were placed in the Negative List under Section 66D, which was declaratory in nature, reaffirming the constitutional non-taxability of such activities.

D. The present appeal concerns the sustainability of service tax demands on Works Contract, Manpower Supply and Rent-a-Cab services received during 01.07.2012 to 31.03.2014, and the legality of appropriation of tax already paid.

E. The Show Cause Notice dated 17.07.2015 alleged non-registration, non-payment of service tax under reverse charge, and non-filing of returns. Although