Sub-consultant not liable for service tax if main consultant paid. Errors in previous assessment to be rectified.

The Tribunal held that the sub-consultant is not required to pay service tax if the main consultant has already done so, as per the Board's Circular and Trade Notices. The Tribunal found that the Commissioner (Appeals) erred in disregarding these clarifications and directed a fresh assessment to verify the main consultant's payment of service tax. The case was remanded for re-adjudication within four months, emphasizing adherence to principles of 'Natural Justice'.

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Issues: Whether the sub-consultant is required to pay service tax when the main consultant has already paid it, and whether penalty is leviable under Section 78 of the Act.

Analysis:
1. The appeal was based on the contention that, as per the Board's clarification letter and various Trade Notices, when a main consultant has discharged the service tax, the sub-consultant is not required to do so. However, the Commissioner (Appeals) held otherwise, disregarding the clarifications provided by the New Delhi Commissionerate and the Mumbai Commissionerate. The Tribunal noted that the Board's Circular and Trade Notices are binding on Departmental Authorities, as established by previous court cases. The appellant presented tabulated details showing fees and service tax paid by the main consultant, which the original authority failed to consider. The Tribunal agreed with the appellant's submission that if these details were taken into account, there would be no service tax liability. The appellant also argued that penalty cannot be levied without prior permission of the Commissioner, which is specified in the Finance Act. The Tribunal found merit in the appellant's arguments and decided that the matter needed further consideration.

2. The Tribunal observed that there was no dispute regarding the appellants being a sub-consultant of the main consultant. It was noted that the Commissioner (Appeals) did not adhere to the Board's Circular and Trade Notices, which clearly stated that the sub-contractor/sub-consultant is not obligated to pay service tax if the main consultant has already done so. The appellants had provided evidence to support their claim, but the original authority failed to acknowledge it. Consequently, the Tribunal concluded that the case should be remanded for a fresh assessment on specific issues. The appellants were directed to demonstrate that the main consultant had indeed discharged the service tax. The Tribunal emphasized that the re-adjudication should be completed within four months, ensuring the principles of 'Natural Justice' were followed throughout the process.

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