Double taxation barred for sub-contractor service tax where main contractor already paid on the same construction service.

A sub-contractor providing commercial and industrial construction services was treated as not liable for service tax where the main contractor had already discharged tax on the same service. Relying on earlier Tribunal decisions and the relevant Board circular, the CESTAT noted that a second levy on the sub-contractor for the identical taxable service would amount to double taxation. On the facts considered, the demand was not sustainable and consequential relief followed.

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Issues: Whether a sub-contractor was liable to pay service tax where the main contractor had already discharged tax on the same service.

Analysis: The demand arose from commercial and industrial construction services provided by the appellant as a sub-contractor. The Tribunal relied on its earlier decisions and the Board circular relied upon by the appellant to hold that taxing the sub-contractor again, when the main contractor had already paid service tax on the same service, would amount to taxing the same service twice.

Conclusion: The sub-contractor was not liable to pay service tax on the facts of the case, and the appeal was allowed with consequential relief.

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