Double taxation on composite works contract service tax was refundable, and pre-01.06.2007 liability did not apply.

Where the same construction-related service tax was paid twice by both the main contractor and the subcontractor, the excess tax could not be retained by the State and refund to the payer was legally warranted. The record showed no separate taxable service by the main contractor beyond the subcontracted work, so double taxation was not justified. The materials also indicated a composite works contract with supply of materials and execution of work, supported by VAT or sales tax payment on the material component. For the period before 01.06.2007, that composite activity was not liable under commercial or industrial construction service on the works-contract component, and the refund claim succeeded.

---

---

Issues: Whether service tax paid twice on the same construction activity by both the main contractor and the subcontractor was refundable to the respondent, and whether the activity, being a composite works contract involving supply of material and execution of work, was taxable under commercial or industrial construction service for the period prior to 01.06.2007.

Analysis: The respondent and the main contractor had both discharged service tax on the same taxable activity, and the record did not show that the main contractor had provided any separate taxable service beyond what the respondent had performed as subcontractor. Where the same taxable service has been taxed twice, the excess collection cannot be retained by the Government, and refund to one of the persons who paid the tax is legally warranted. The materials on record also showed payment of VAT or sales tax on the material component, indicating a composite works contract. Such works contract service came into the tax net only from 01.06.2007, and for the disputed period the respondent could not be fastened with liability under commercial or industrial construction service on that component.

Conclusion: The respondent was entitled to refund of the service tax paid, and the Revenue's challenge to the refund failed.

Ratio Decidendi: Tax paid twice on the same taxable service cannot be retained by the State, and a composite works contract was not taxable as works contract service prior to 01.06.2007.

---