2016 (7) TMI 782

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.... 3rd respondent, for a total contract  amount of Rs. 15,79,93,560/-. The petitioner sub  contracted the civil and plumbing works under the above  said contract to the 4th respondent, for an amount of  Rs. 13,12,84,710/-. Issue involved herein pertains to levy of  service tax. Ext.P3 invoice would indicate that service tax  was levied on the bill raised by the petitioner on the 3rd  respondent. Therefore the petitioner took a stand that no  service tax need be levied on the bill raised by the 4th  respondent on the petitioner. The 4th respondent  thereupon sought clarification from the 2nd respondent as to  whether there will be any service tax liability on the 4th  respondent, beca....

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....gh its circular dated 7.10.1998 that, a sub contractor  should not be brought in the ambit of liability of tax and the  liability will be on the principal contractor. But it is noticed  that the Board has changed its view through Ext.P8 Master  Circular, in view of the credit made available under the  Cenvat Credit Rules, 2004. The case decided under Ext.P4  pertains to the Master Circular period prior to 23.8.2007.  However, the Tribunal observed that if it is proved from the  records on verification that the principal contractor had  discharged the tax liability in respect of the contract,  cascading affect should be avoided and they are entitled to  refund. 3. Contention of the peti....

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....held that the sub contractor is not liable to pay service tax  for the services provided by him. However it is for the  adjudicating authority to decide on verification of records  regarding the discharge of liability of 'service tax' and to  decide with respect to the credit relating to the 'input  service'. The directions issued by the CESTAT in Ext.P4  judgment is also to the affect of issuing similar directions. 5. On the facts of the case at hand, it is evident that  this court had issued an interim order staying operation of  Exts.P6 and P8 to the extent it relates to the sub- Contract  in which case the principal contractor pays service tax on  the whole amount of the....