2025-VIL-1516-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax – Activities in relation to setting up of sub-station, Eligibility to Exemption, Services related to Transmission of Electricity, Works Contract Service, Railway Construction - Whether the services provided by the appellant to PGCIL and RITES for transmission of electricity are exempt from service tax under Notification Nos. 11/2010 and 45/2010 - HELD - the various work orders have been awarded to the appellant by PGCIL for site levelling and civil construction work in connection with setting up of sub-station and smooth functioning of the same. It is a fact that transmission of electricity cannot be accomplished unless the site levelling and civil construction services are availed by PGCIL. The services of civil construction and site levelling provided to PGCIL, the national electric transmission utility, are used in relation to transmission of electricity and are therefore exempt from service tax under the said notifications - From the definition of “sub-station”, it is clear that without a sub-station, transmission of electricity is not possible. Therefore, in the instant case, the nexus between the site formation services and works contract services with transmission of electricity is very much evident. The observation in the impugned order, that works under the impugned work orders do not have any nexus with the transmission of electricity, is not sustainable – Further, as and when the appellant became aware that the exemption under Notification No 11/2010 was no longer available, they immediately suo motu calculated the Service Tax liability on the services provided to PGCIL and deposited the Service Tax liability, along with interest and intimated the same to the Department. Thus, in these facts and circumstances, there was no need to issue SCN for this demand - As the demand of Service Tax along with applicable interest, has been paid before issue of the notice, no penalty is imposable – The impugned order is set aside and the appeal is allowed - Whether the construction and repairing of approach road in Sikkim Project, meant for general public use, is exempt from service tax under Notification No. 25/2012 - HELD - The construction and repairing of the approach road, which is to be used by the general public, is exempt from service tax under Sl. No. 13(a) of Notification No. 25/2012-ST. The Ld. Commissioner had not provided any substantial evidence to contradict the certificate issued by the PGCIL official stating that the road is for general public use - Whether the construction of railway line from Salakati Railway Station to Bongaigaon Thermal Power Project is exempt from service tax - HELD - The construction of the railway line, including formation of railway embankment and construction of bridges, is exempt from service tax. The definition of "railway" under the Railways Act, 1989 includes sidings and branches used for the purposes of or in connection with a railway, the exemption is available for all works in relation to railways, irrespective of whether it is a Government or private railway.
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