TaxTMI 
TaxTMI 
2026 (8) TMI 1138
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....s also equal penalty under section 78 and section 77(2) of the Finance Act, 1994. (impugned order). 2. The brief facts of the case are that the appellant is a partnership firm and was given work order by one, M/s RK Infra & Engineering (India) Pvt Ltd for carrying out certain work at integrated steel plant of M/s Bramhani Industries Ltd. This work was given to the contractor M/s RK Infra & Engineering (India) Pvt Ltd and a part of the work was given to the appellant as sub-contract. Based on certain details available in the books of accounts, etc., the department felt that they were required to discharge service tax in respect of work being executed by them. Learned Advocate for the appellant has submitted that as is apparent from the wo....
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....ents submitted by the appellant and thereafter came to the conclusion that majority of the services provided are towards excavation in soil and rock fill and therefore, in terms of provisions under section 65A of the Finance Act, he considered this contract as composite contract, where the classification has to be determined based on essential feature or dominant element of the transaction. He has also imposed penalty under section 78 and has denied the request under section 80. 4. Learned Advocate has also contested that theirs is basically WCS and therefore, they are entitled for composition scheme. He has further submitted that in this case, there is no dispute that main contractor has paid service tax on the entire contract value inc....
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....ues to be decided in this appeal are, as under: a) Whether services being provided by the appellant were in the nature of SFCS or WCS. b) Whether a sub-contractor is liable to pay service tax or otherwise. c) Whether in the facts of the case, the department could have invoked extended period for demand of service tax or otherwise. d) Whether the request for waiver of penalty under section 80 can be allowed in the facts of the case or otherwise. 8. Insofar as the first issue is concerned, we find that the adjudicating authority has gone through the documents relating to the work executed by them, which involved various activities, to come to the definitive conclusion that the work cannot be classified u....
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....rvice tax applicable thereon. Therefore, this plea fails on both the counts. 10. Insofar as invocation of extended period is concerned, we find that this issue was also discussed in detail in the judgment of Akash Engineering Services (supra), wherein, inter alia, on this issue, the Tribunal took a view that in the issue relating to sub-contractor and contractor considering the circumstances prevailing prior to the issuance of circular in 2007, the extended period of limitation is not invokable. The relevant paras from the judgment are cited below. "47. It is an admitted fact that prior to 2007 Circular, the department was also apparently under the impression that there is no liability for sub-contractor to pay service tax when ....
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....ntire demand is being made heavily relying on the 2007 Master Circular, when the earlier Circulars were taking a contrary stand, irrespective of the fact that the law itself had changed much before 2007 concerning Cenvat credit, and the provisions under Sec 66 and 68 discussed supra have remained more or less the same. Therefore, this appears to be an issue of interpretation and under the circumstances, neither extended period can be invoked nor penalties can be imposed under Sec 78 etc. There is no sufficient strong evidence on record to suggest that Appellants have deliberately decided not to discharge service tax. The fact that Department asked the details of payment from principal contractor shows that department also had doubt as to wh....