Sub-contractor exemption for water treatment plant work was upheld where identical facts had already favoured the main contractor.

A sub-contractor engaged in construction of a water treatment plant was considered entitled to the same exemption benefit as the main contractor, because the Tribunal treated the dispute as identical to an earlier matter involving the same project and subcontract work. It noted that the benefit already extended in the sister concern's case had been followed in later decisions, and that a later jurisdictional order had also taken a similar view on works for Kerala Water Authority and Degremont Ltd. On that basis, the service tax demand, interest and related liability were held unsustainable.

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Issues: Whether the appellant, being a sub-contractor engaged in the construction of a water treatment plant for Kerala Water Authority, was entitled to the benefit of exemption and consequently not liable to service tax, interest and related demands.

Analysis: The Tribunal noted that in the appellant's sister concern, arising from an identical factual matrix involving the same project and the same nature of subcontract work, it had already been held that the benefit extended to the main contractor could not be denied to the sub-contractor. The Tribunal also noticed that the earlier view had been followed in subsequent decisions and that the jurisdictional Commissioner had, in a later order, taken a similar position regarding works for Kerala Water Authority and Degremont Ltd. On that basis, the Tribunal found no reason to distinguish the present case from the earlier identical matter.

Conclusion: The appellant was entitled to the same exemption benefit as the main contractor, and the service tax demand and connected liability could not be sustained.

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