2011 (3) TMI 217 - AT - Service Tax

Remand - Whether sub-contractor is not liable to pay service tax if the main contractor has paid the service tax - The contention of the appellant, which is to be considered at this stage, is that the benefit of Notification No. 12/2003-ST dated 20.6.2003 should be granted to them on the strength of the available documentary evidence - In the interest of justice, having due regard to the Hon ble High Court s order, we have taken this additional evidence on record with a view to avoiding delay of administration of justice in the case - Both sides agree that the responsibility to examine these documents is with the original authority. We, therefore, are inclined to remand the case to that authority for expeditious de novo adjudication of the matter whether the assessee is entitled to the benefit of certain circulars - assessee had, in fact, claimed support from certain circulars which were in force during the period of dispute - Prima facie the said circulars favoured the appellant - In the result, the impugned order is set aside and this appeal is allowed by way of remand

Summary

Issues:
1. Benefit of Notification No. 12/2003-ST dated 20.6.2003
2. Entitlement to benefit of certain circulars

Analysis:

Issue 1: Benefit of Notification No. 12/2003-ST dated 20.6.2003
The appeal before the Appellate Tribunal arose after a remand order from the High Court. The appellant, represented by counsel, sought the benefit of Notification No. 12/2003-ST based on documentary evidence showing payment of sales tax on goods and materials used in providing taxable services. The appellant contended that invoices demonstrated separate values for goods and materials. The Tribunal noted that some invoices had been previously examined and accepted. Despite objections from the respondent's representative, the Tribunal accepted a compilation of invoices as additional evidence for the sake of justice. The case was remanded to the original authority for further adjudication.

Issue 2: Entitlement to benefit of certain circulars
The second issue pertained to the appellant's entitlement to benefit from specific circulars during the period of dispute. The appellant argued that the adjudicating authority had disregarded relevant circulars in favor of a later circular from 2007. The Tribunal observed that the appellant had relied on circulars applicable during the dispute period to support their claim of non-liability for service tax if the main contractor had paid it. The Commissioner's decision to apply a 2007 circular retrospectively was questioned, emphasizing the need to consider the oppressive nature of circulars and the retrospective application thereof. The Tribunal directed the Commissioner to reevaluate this issue along with others, granting the appellant an opportunity to present evidence and be heard.

In conclusion, the impugned order was set aside, and the appeal was allowed for remand. The Commissioner was instructed to make a fresh decision on all issues, including those highlighted in the High Court's remand order, ensuring the appellant's right to present evidence and provide personal testimony.