TaxTMI 
TaxTMI 
2023 (4) TMI 351
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....hno Construction Ltd., M/s Raj Furnitures and M/s Tirath Ram Ahuja Pvt Ltd. 3. Service tax audit was conducted of M/s Tirath Ram Ahuja Pvt Ltd and the department noted that the appellant had rendered construction services amounting to Rs. 21,93,750/- to M/s Tirath Ram Ahuja Pvt Ltd. as a sub-contractor and had not paid service tax on the said services. It was also observed that the appellant was not filing any ST3 returns with the Department. Thereafter, investigations was initiated against the appellant. The appellant was requested to provide data/ documents, but the appellant did not respond believing that being a proprietor, as per the Circular No. B11/3/98 dated 07.10.1998, it was clarified that the entire service tax, when paid by the principal contractor stands paid, the sub-Contractor need not pay any service tax. Thereafter, a show cause notice no. DL/ST/AE/Gr.9 /Inq/160/2011/ 23342 dated 16.10.2012 was served on them demanding service tax of Rs. 19,48,077/- alongwith interest and penalty as per the details given below: Period Taxable Value (Rs) Rate of Service Tax Service Tax Amount (Rs) 2007-08 2,193,750 12.36% ....
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..... 593 (Tri.-Kolkata)] v) CCE, Pune vs. Coca-Cola India Pvt Ltd. [2007 (213) ELT 490 (SC)] [2007-TIOL-245-SC-CX] vi) CCE &C, Vadodra-II vs. Indeos ABS Limited [2010 (254) E.L.T. 628 (Guj.)] vii) Wolfra Tech (P) Ltd. Vs. CCe, Mangalore [2012 (284) E.L.T. 89 (Tri. Bang.)] 6. He also submitted that the extended period of limitation is not invokable as the appellant was in bona fide belief that the services provided as a sub-contractor was not liable to tax, as the principal contractor had discharged the service tax liability on the whole contract value. Therefore, it cannot be said that the appellant had any intention to evade tax. He also submitted that the appellant had received confirmation from the principal contractors that they were paying the service tax on the entire value on the contract during the period of dispute and, therefore, the penalty must be dropped extending the benefit of Section 80 of the Finance Act. 7. The learned authorized representative submitted that the adjudicating authority and the Commissioner (Appeals) were correct in confirming the demand of service tax along with the applicable inter....
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....ion and finishing services, repair, alteration, renovation or restoration of, or similar services, in relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects; 9. It is not in dispute that the activity undertaken by the sub-contractor falls under the category of 'Works Contract' service. What is sought to be contended is that the main contractors, who had given sub-contracts to the sub-contractor through various work orders, had already discharged the Service Tax liability on the entire contract amount and, therefore, the sub- contractor was not required to pay any Service Tax. 10. Section 66, as substituted by the Finance Act, 2007, provides that there shall be levied a tax (hereinafter referred to as the 'Service Tax') @ 12% of the value of taxable services of various sub-clauses of clause (105) of section 65 and collected in such a manner as may be prescribed. Section 68 of the Act provides that every person providing taxable service to any person shall pay Service Tax at the rate specified in section 66 in such a manner and....
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....e Act provides that every person, which would include a sub-contractor, providing taxable service to any person shall pay Service Tax at the rate specified. Therefore, in the absence of any exemption granted, a sub-contractor has to discharge the tax liability. The service recipient i.e. the main contractor can, however, avail the benefit of the provisions of the CENVAT Rules. When such a mechanism has been provided under the Act and the Rules framed thereunder, there is no reason as to why a sub-contractor should not pay Service Tax merely because the main contractor has discharged the tax liability. As noticed above, there can be no possibility of double taxation because the CENVAT Rules allow a provider of output service to take credit of the Service Tax paid at the preceding stage. xxx xxx xxx 29. The submission of the learned Counsel for the Respondent regarding 'revenue neutrality' cannot also be accepted in view of the specific provisions of Section 66 and 68 of the Act. A sub-contractor has to discharge the Service Tax liability when he renders taxable service. The contractor ca....
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....here is no intend to evade payment of duty in such situation. The appellants relied on various case laws to reiterate their views. We find that the appellant is having a strong ground regarding the question of time-bar. It is to be noted that all invoices, for full consideration, have been raised by RSIC and the amount collected from the clients [importers and exports] were subjected to service tax which was deposited to the Government. RSIC in turn are paying certain amount to the appellants to get the services in these ICDs. In such situation, there is a clear possibility for a bona fide belief that as the whole amount has been subjected to service tax the amount received by the appellant may not be liable to service tax in connection with the services rendered by them. The issue involved has been a subject matter of interpretation by the Tribunal and High Courts. In fact the earlier Circular issued by the Board, covering the period prior to the introduction of Cenvat Credit Rules gave an impression that when the main service provider discharged the service tax on gross value there may not be tax liability on the sub-contractor rendering similar service to the main contractor. Th....