TaxTMI 
TaxTMI 
2025 (6) TMI 1880
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....ed under Section 65(105) (zzd) of the Finance Act, 1994. An audit of the records was conducted on 12.09.2011 & 13.09.2011 for the period from 2006-2007(H2) to 2010-2011 under Rule 5A of the Service Tax Rules, 1994. During audit, the department noted that the appellant was claiming abatement under Notification No.1/2006-ST & paying service tax on 33% of taxable value for the financial years- 2006-2007 to 2010-2011. The department further noted that the appellant had filed the ST-3 returns under 'Erection, Commissioning or Installation Services' classifying the services provided by them under Section 65(105) (zzd) of the Finance Act, 1994 whereas, from the ST-3 returns, it appeared that in the respective columns specified in the ST-3 returns, the appellant had neither claimed any exemption Notification, nor they had shown in the ST-3 returns that they were claiming exemption under Notification No. 1/2006-ST dated 1.03.2006. 3. After scrutiny of records, a show cause notice 37/audit/2012-13 dated 24.04.2012 for the period 2008-09 to 2010-11 was issued to the appellant wherein service tax of Rs.2,97,53,909/- was demanded including cess under section 73(1), interest under sec....
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....xtended period of limitation is not invokable. Demand for the period 2008-09 to 2010-11 is time barred. * Penalty under section 78 of the Finance Act, 1994 is not imposable on the appellant for the period 2008-09 to 2010- 11. * Penalty under section 76 of the Finance Act, 1994 is not imposable on the appellant for the period 2011-12. * Penalty under section 76 of the Finance Act, 1994 is not impossible. 6. Learned Authorised Representative at the outset reiterated the findings of the impugned order. He further submitted that the issue of liability of service tax on sub-contractor was no more res- integra. 7. We have considered the submissions advanced in the ground of appeal of the Appeal Memo and the learned Authorised Representative of the Department. We find that it is an admitted fact that the appellant was a sub-contractor. The appellant himself has stated that as per Board‟s Circular, sub-contractor were not liable to pay service tax. 8. We find that this issue has been considered by the Larger Bench of this Tribunal in the decision of Commissioner of Service Tax, New Delhi vs. M/s. Melange Developers Pvt Ltd Service Tax Appeal No.503....
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....nt 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 within such a period as may be prescribed. Section 94 of the Act deals with power to make Rules. Sub-section (1) provides that the Central Government may, by Notification in the official gazette, make Rules for carrying out the provisions of Chapter V of the Act. Sub-section (2)(a) provides that such Rules may provide for collection and recovery of Service Tax under sections 66 and 68 of the Act. In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 and section 94 of the Act and in supersession of the CENVAT Credit Rules, 2002 and Service Tax Credit Rules, 2002, the Central Government framed the CENVAT Cr....
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....three taxable services, but later 100 services had been specified as taxable services and that since the introduction of Service Tax, number of clarifications had been issued, but it had become necessary to take a comprehensive review of all the clarifications keeping in view the changes that had been made in the statutory provisions, judicial pronouncements and other relevant factors. The relevant portion of the Master Circular, insofar as it relates to sub-contractors, is reproduced below: 999.03/23.08.07 A taxable service provider outsources a part of the work by engaging another Service provider, generally known as sub- contractor. Service tax is paid by the service provider for the total work. In such cases, whether service tax is liable to be paid by the service provider known as sub-contractor who undertakes only part of the whole work A sub-contractor is essentially a taxable service provider. The fact that services provided by such sub- contractors are used by the main service provider for completion of his work does not in any way alter the fact of provision of taxable service by the sub- contractor. Services provided by sub- contractors are in the nature of inpu....
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....ctor, 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 26. At this stage, it would also be useful to refer to a larger Bench decision of the Tribunal in Vijay Sharma & Company vs CCE, Chandigarh reported in 2010 (20) STR 309 (Tri.- LB). The issue that arose before the larger Bench was as to whether service provided by a sub-broker are covered under the ambit of Service Tax and taxable or not. After noticing that a sub-contractor is liable to pay Service Tax, the larger Bench examined as to....