Tribunal Overturns Order Due to Time Bar, Rules in Favor of Sub-Contractor on Service Tax Liability

The Tribunal set aside the impugned order solely on the ground of time bar, allowing the appeal. The issue of determining liability of the sub-contractor to pay Service Tax when the main contractor had already settled the tax was resolved in favor of the sub-contractor, citing precedents and lack of mala fide intention. The demand beyond the normal limitation period was deemed unsustainable, leading to the decision in favor of the appellant.

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Issues involved:
Determining liability of sub-contractor to pay Service Tax when main contractor already paid, and whether extended period of limitation can be invoked.

The appellant, a sub-contractor, contested liability to pay Service Tax when the main contractor had already settled the tax on the full contract value. The issue was resolved by a larger bench in a previous case, confirming sub-contractor's liability. Appellant argued lack of mala fide intention and claimed the demand was time-barred.

In support, appellant cited various judgments including Thakarshi J Likhiya, Intermark Shipping Agencies, Laxmi Engineering, Sharma Decorators, Shanti Construction Co., Heena Enterprises, and MK Enterprise. These judgments held demands beyond the normal limitation period as unsustainable.

The revenue representative reiterated the findings of the impugned order, maintaining the liability of the sub-contractor.

After reviewing submissions and records, the Tribunal acknowledged conflicting judgments on the taxability of sub-contractors, which were resolved by the larger bench. Citing precedents, the Tribunal concluded that no mala fide intention could be attributed to the appellant, thus ruling the demand beyond the normal limitation period as unsustainable.

Decision:
The Tribunal set aside the impugned order solely on the ground of time bar, allowing the appeal.

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