Service tax demand on road maintenance set aside by Tribunal, remanded for payment verification. Contractor's payment considered. Appellant not liable.

The Tribunal set aside the demand for service tax on maintenance & repair of roads, remanding the matter for verification of the remaining service tax payment. It held that the main contractor's payment on behalf of the appellant should be considered as payment by the appellant. The Tribunal also ruled that the appellant is not liable to pay service tax for maintenance & repair of roads, directing the adjudicating authority to verify the payment of service tax for the remaining demand and issue an appropriate order after document verification.

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Issues:
Demand of service tax for site formation service and mining services provided by the appellant without payment of service tax.

Analysis:
The appellant entered into a sub-contract for overburden removal/coal excavation with a main contractor. The Revenue alleged that the appellant provided Site Formation Service and Mining Services without paying service tax. The appellant argued that the main contractor discharged the service tax liability on their behalf, citing legal precedents. The appellant contended that they are not liable to pay service tax for maintenance & repair of roads as per Section 97 of the Finance Act, 2012. The appellant requested a remand to verify the payment of service tax for the remaining liability. The Revenue opposed, claiming the appellant is liable to pay service tax. The Tribunal found that the main contractor's payment on behalf of the appellant should be considered as payment by the appellant, based on legal principles. The Tribunal also held that the appellant is not liable to pay service tax for maintenance & repair of roads. The matter was remanded to verify the payment of service tax for the remaining demand. The adjudicating authority was directed to provide an opportunity for document verification and pass an appropriate order accordingly.

In conclusion, the Tribunal disposed of the appeal by setting aside the demand for service tax on maintenance & repair of roads and remanding the matter for verification of the remaining service tax payment. The Tribunal emphasized the need for a fair verification process and compliance with legal provisions in reaching a final decision.

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