Whether activity of laying of optical fibre cables for BSNL and other telecom service providers leviable to service tax?

PJ/Case law/2013-14/1923

Case:- M/s CHAITANYA ENTERPRISES Vs THE COMMISSIONER OF CENTRAL EXCISE HYDERABAD.

Citation:- 2013-TIOL-1414-CESTAT-BANG

Issue:- Whether activity of laying of optical fibre cables for BSNL and other telecom service
providers leviable to service tax?

Brief Facts:- This stay petition is filed for waiver of pre-deposit confirmed as service tax liability, interest thereof and penalty under Section 78 of the Finance Act 1994 on the ground that the appellant has not discharged service tax liability under the category of “erection, commissioning or installation services” when they have rendered the service of laying of optical fibre cables for BSNL and other telecom service providers.

Appellant’s Contention:- The appellant pleaded that Board vide Circular No. 123/5/2010-TRU dated 24/5/2010 has specifically at Sl. No. 2 clarified that the activity of laying of cables is not a taxable service under sub-section (105) of Section 65 of the Finance Act 1994. The appellant also rely upon the decision of the coordinate bench of the Tribunal in the case of Commissioner of Central Excise and Service Tax Bhopal Vs. Sanjeev Kumar Jain [2013-TIOL-833-CESTA T-DEL] and Nicco Corporation Ltd. Vs. Commissioner of Service tax, Kolkata [2012-TIOL-190-CESTA T-KOL].

Respondent’s Contention:- The Revenue on the other hand reiterates the finding of the lower authorities.

Reasoning of Judgment:- The Tribunal after carefully considered the submissions made by both sides, finds that it is not in dispute that the appellant is laying optical fibre cables for BSNL and other telecom service providers. The appellant has claimed that this activity does not amount to rendering of any service but has also paid service tax claiming the benefit of Notification No. 1/2006-ST after availing the benefit of abatement of 67%. Be that as it may, The Tribunal also finds that CBEC Circular dated 24/5/2010 clarifies the issue which is in favour of the assessee. On considering the circular, this Tribunal in the case of Nicco Corporation Ltd. (supra) and in the case of Sanjeev Kumar Jain (supra) has taken a view which is in favour of the assessee.

The Tribunal decides that they do not find any reason to deviate from the said view, at this juncture. In view of the foregoing, The Tribunal finds that the appellant has made out a strong prima faciecase for waiver of the pre-deposit of the amount involved. Application for waiver of pre-deposit of the amount involved is allowed and recovery thereof stayed till the disposal of the appeal.

Decision:- Stay granted.

Comment:- The crux of this case is that Circular No. 123/5/2010-TRU dated 24/5/2010 has specifically at Sl. No. 2 clarified that the activity of laying of cables is not a taxable service under sub-section (105) of Section 65 of the Finance Act 1994 and the same view was upheld while granting stay in the case of Nicco Corporation Ltd. and Sanjeev Kumar Jain (supra). Accordingly, as the prima facie case is in favour of the assessee, stay application was allowed.

Comments

PJ/Case law/2013-14/1923

Post a Comment

Query