Exemption for subcontractors on Government works upheld where the same exempted service is ultimately rendered through the contractual chain.

Notification No. 25/2012-ST was held to extend to a subcontractor involved in services ultimately rendered for Government or local authority projects, because the exemption was not confined to the main contractor who directly contracted with the public body. The Tribunal followed earlier coordinate Bench decisions holding that the benefit applies where the same exempted work is performed through the contractual chain, and reiterated that such decisions bind subordinate authorities while they remain good law. On that basis, the subcontractor was found entitled to exemption relief and the order granting the benefit was sustained.

---

---

Issues: Whether the benefit of Notification No. 25/2012-ST dated 20.06.2012 was available to a subcontractor providing services indirectly for Government or local authority projects.

Analysis: The exemption notification covered services provided to Government, a local authority, or a governmental authority in relation to specified public utility works. The dispute was whether such benefit was confined only to the main contractor who directly contracted with the Governmental body, or whether it also extended to a subcontractor who contributed to the same exempted work through the main contractor. The Tribunal noted that the same legal question had already been decided in earlier coordinate Bench decisions holding that the exemption was not restricted to direct service providers. It further held that the binding force of a judicial decision does not depend on whether a party chose to accept it in a particular case; so long as the decision holds the field, it is binding on authorities below the deciding Bench.

Conclusion: The subcontractor was entitled to the benefit of the exemption notification.

Final Conclusion: The appeal failed and the order granting exemption relief was sustained.

Ratio Decidendi: A coordinate Bench decision on the availability of an exemption notification binds subordinate authorities, and the benefit of the notification extends to a subcontractor where the same exempted service is ultimately rendered for Government or local authority work.

---