Service tax liability does not survive against a sub-contractor when the main contractor has already paid the full tax on the same service.

Where the main contractor has already discharged the entire service tax on the same service, no separate service tax liability survives against the sub-contractor for that service. CESTAT New Delhi applied this principle on the admitted factual position that the tax burden had been fully paid by the main contractor, and relied on prior Tribunal decisions supporting the same view. The sub-contractor was therefore not liable to pay service tax in these circumstances, and the Revenue's challenge was rejected.

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Issues: Whether a sub-contractor is liable to pay service tax when the entire service tax liability on the same service has already been discharged by the main contractor.

Analysis: The liability was examined on the admitted factual position that the main contractor had paid the entire service tax. Reliance was placed on Tribunal decisions holding that, where the whole tax burden on the service stands discharged by the main contractor, no separate service tax liability survives against the sub-contractor for the same service.

Conclusion: The sub-contractor was held not liable to pay service tax in these circumstances, and the Revenue's challenge was rejected.

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