Sub-contractor not liable for service tax due to limitation, Tribunal rules.

The Tribunal held that the sub-contractor is liable to pay service tax even if the main contractor has already paid it. However, the demand for service tax was deemed barred by limitation as the extended period of limitation was found inapplicable. Therefore, the Tribunal set aside the entire demand, allowing the appeal on the ground of limitation and providing consequential relief as per law.

---

---

Issues Involved:
1. Liability of sub-contractor to pay service tax when the main contractor has already paid.
2. Applicability of the extended period of limitation for the demand of service tax.

Summary:

1. Liability of Sub-Contractor to Pay Service Tax:
The appellant, a partnership concern registered under 'Commercial or Industrial Construction Service,' contended that as a sub-contractor, they were not liable to pay service tax since the main contractor had already discharged the tax on the entire work. They relied on trade notices and various judicial precedents supporting this view. However, the Tribunal referred to the Larger Bench decision in CST Vs. Melange Developers P. Ltd., which clarified that a sub-contractor is liable to pay service tax even if the main contractor has already paid it. The Tribunal stated, "A sub-contractor would be liable to pay Service Tax even if the main contractor has discharged Service Tax liability on the activity undertaken by the sub-contractor."

2. Applicability of Extended Period of Limitation:
The appellant argued that the demand was time-barred as the show cause notice was issued on 25.03.2009 for the period 2004-05 and 2005-06. The Tribunal considered various decisions and circulars, concluding that the extended period of limitation could not be invoked in such cases. It was noted that the issue involved interpretation of law and there was no intention to evade payment of duty. The Tribunal cited Max Logistics Ltd. Vs. Commissioner of Central Excise, Jaipur, and other cases to support this view, stating, "In the facts and circumstances of this case, we find that the demand for extended period is not sustainable."

Conclusion:
The Tribunal held that while the appellant/sub-contractor is liable to pay service tax, the demand is barred by limitation. The extended period of limitation was deemed inapplicable, and the entire demand was set aside. The appeal was allowed on the ground of limitation, providing consequential relief as per law.

---