By TIOL News Service

BANGALORE, SEPT 25, 2013: THIS stay petition is filed for waiver of predeposit of an amount of Rs.90,70,559/- 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.

Counsel submits 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. He would 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-CESTAT-DEL ] and Nicco Corporation Ltd. Vs. Commissioner of Service tax, Kolkata [ 2012-TIOL-190-CESTAT-KOL ].

Tribunal held.

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. 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. and in the case of Sanjeev Kumar Jain have taken a view which is in favour of the assessee. The appellant has made out a strong prima facie case for waiver of the predeposit of the amount involved. Application for waiver of predeposit of the amount involved is allowed and recovery thereof stayed till the disposal of the appeal.

(See 2013-TIOL-1414-CESTAT-BANG)