Full discharge of service tax liability bars duplicate demand when payment is made by both provider and recipient.

Once the entire service tax attributable to a taxable service has been deposited with the Government, a demand cannot be sustained again merely because the tax was paid in parts by different persons. Here, the appellant had paid 50% and the service recipient had paid the remaining 50%, resulting in full discharge of the tax liability. As there was no short payment to the Revenue, the service tax demand was held unsustainable and was set aside.

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Issues: Whether the service tax demand could be sustained when the appellant had paid 50% of the tax and the service recipient had paid the remaining 50%, resulting in full deposit of the tax in the Government exchequer.

Analysis: The dispute turned on whether the impugned taxable service had suffered tax only in part at the hands of the appellant or had, in substance, been fully discharged through combined payments by the appellant and the service recipient. The governing principle applied was that once the entire tax due on a taxable service stands deposited with the Government, the department cannot demand the same tax again merely because payment was made by more than one person. Since the record showed that the appellant had paid 50% of the tax and the service recipient had paid the balance 50%, the demand could not be sustained as there was no short payment to the Revenue.

Conclusion: The demand for service tax was not sustainable and was set aside in favour of the assessee.

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