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of <h1>Tribunal grants Stay Petition for waiver of Service Tax liability in subcontractor case</h1> The Tribunal allowed the appellant's Stay Petition seeking waiver of pre-deposit of Service Tax liability, interest, and penalties under the Finance Act, ... Service Tax liability on amount received from the main contractor - whether assessee is liable to pay if the main contractor has discharged the Service Tax liability on the total contract value? - both the lower authorities have relied upon CBE&C Circular 23.08.2007 to demand service tax - Held that:- The amount which has been received by them is prior to 23.08.2007 and by virtue of the main contractor having discharged the Service Tax liability, the appellant is not liable to discharge the Service Tax liability fortified by the fact that the earlier CBE&C circular, dt.6.6.1997 and 2.7.1997 specifically mentioned that the sub-contractors need not pay Service Tax if the main contractor has paid the Service Tax. Tribunal in the case of Monarch Surveyors & Contractors [2013 (1) TMI 547 - CESTAT MUMBAI] has specifically applied this circular and held in favour of the assessee therein, who was a sub-contractor prior to 23.08.2007. Appellant has made out a strong case for waiver of pre-deposit of the amounts involved. Issues:1. Stay petition for waiver of pre-deposit of Service Tax liability, interest, and penalties under Sections 76, 77 & 78 of Finance Act, 1994.Analysis:The appellant filed a Stay Petition seeking waiver of pre-deposit of an amount confirmed as Service Tax liability, interest, and penalties under relevant sections of the Finance Act, 1994. The demand pertained to the period 2005-2006 to 2006-2007 when the appellant acted as a sub-contractor for certain main contractors. The lower authorities held the appellant liable for Service Tax on the amount received from the main contractors, even though the main contractors had already discharged the Service Tax liability on the total contract value. This decision was based on CBE&C Circular 23.08.2007. However, the Tribunal noted that post 23.08.2007, the appellant had not received any amount from the main contractors for the services rendered. The amounts received were prior to this date, and considering the circulars from 1997 which exempted sub-contractors from paying Service Tax if the main contractor had already paid, the Tribunal found in favor of the appellant. Additionally, referencing a previous case involving Monarch Surveyors & Contractors, where a similar circular was applied, the Tribunal supported the appellant's position.The Tribunal, after thorough consideration, concluded that the appellant had presented a strong case for the waiver of pre-deposit of the amounts involved. Consequently, the application for waiver of pre-deposit of the said amounts was allowed, and the recovery thereof was stayed pending the disposal of the appeal.
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