TaxTMI 
TaxTMI 
2025 (8) TMI 1468
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...., 1994, and for imposition of penalty under section 78 of Finance Act, 1994. Appellant herein, on receipt of notice, had claimed that the agreement was in fact entered into between their principal contractor M/s Geo Tech India and the recipient of the service and full liability under Finance Act, 1994 thereof discharged on the same value that the notice had been charging the principal contractor. It was claimed that tax liability would not arise in circumstances in which principal contractor discharged the levy in order to ensure that double taxation did not occur. That their claim was not allowed, owing to which the tax liability came to be confirmed along with all the other detriments, is the focus of the appeal before us. 2. According to Learned Chartered Account appearing for the appellant, discharge of tax liability by the principal manufacturer precludes any liability on sub-contractors and relied upon the decision of the Tribunal in DNS Contractor v. Commissioner of Central Excise, Delhi - I [(2015) 58 taxmann.com 154 (New Delhi - CESTAT)]. It was further contended that neither was any tax charged in the bill raised on the principal contractor nor did the principal contra....
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....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 Credit Rules, 2004. It is, therefore, clear that every person (which would include a sub-contractor) providing taxable service to any person (which will include a main contractor) shall pay Service Tax at the rate specified in section 66 in the manner provid....
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....of tax paid on input services even if the input service and the output service belonged to different taxable categories. The aforesaid Service Tax Credit Rules were later superseded on 10 September, 2004 by CENVAT Credit Rules, 2004. Rule 3 of these Rules provides that a manufacturer or producer of final product or a provider of output service shall be allowed to take credit (known as 'CENVAT Credit') of various duties under the Excise Act, including the Service Tax leviable under sections 66, 66A and 66B of the Act. Rule 3(4) further provides that CENVAT Credit may be utilized for payment of Service Tax on any output service. It is for this reason that the Master Circular dated 23 August, 2007 was issued superseding all the earlier Circulars, Clarifications and Communications. 15. It is not in dispute that a sub-contractor renders a taxable service to a main contractor. Section 68 of the 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. th....
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....CENVAT Credit Rules. The relevant paragraph 9 is reproduced below : "9. It is true that there is no provision under Finance Act, 1994 for double taxation. The scheme of service tax law suggest that it is a single point tax law without being a multiple taxation legislation. In absence of any statutory provision to the contrary, providing of service being event of levy, self same service provided shall not be doubly taxable. If Service tax is paid by a sub-broker in respect of same taxable service provided by the stock-broker, the stock broker is entitled to the credit of the tax so paid on such service if entire chain of identity of sub-broker and stock broker is established and transactions are provided to be one and the same. In other words, if the main stock broker is subjected to levy of service tax on the self same taxable service provided by sub-broker to the stock broker and the sub-broker has paid service tax on such service, the stock broker shall be entitled to the credit of service tax. Such a proposition finds support from the basic rule of Cenvat credit and service of a subbroker may be input service provided for a stock-broker if there is integrity between the....
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.... would be available as credit to the main contractor. Learned Jt. CDR relies on the Tribunal's decision in the case of Safe and Sure Marine Services Pvt. Ltd. v. CST, Mumbai reported as 2012 (28) S.T.R. 30 (Tri.-Mumbai) laying down that it is the responsibility of the sub-contractor to pay Service Tax. But keeping in view the other decisions referred supra, and keeping in view that when the principle contractor has paid the Service Tax on the entire value, and keeping in view that exchequer cannot be enriched on account of double taxation and keeping in view that the Revenue has already earned its share of Service Tax whether coming from the pocket of main contractor or from the pocket of sub-contractor and keeping in view the earlier Boards' clarifications which were relevant during the period which stand relied upon the case of JAC Air Services and keeping in view that concept of Service Tax are still not clear and keeping in view that there was a pattern in the industry for payment of Service Tax by the main contractor and keeping in view that entire situation is revenue neutral, I deem it fit to set aside the impugned order and allow all the appeals with consequential relief.' ....