9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (5) TMI 330 - AT - Service TaxLevy of ST on sub-contractor where main contractor has paid service tax - Maintenance and Repair - Notification 12/2003-ST - Though this claim was not made in the adjudication proceedings they had made this claim in the first appeal along with necessary supporting documents to prove the value of materials sold - the disputed amount should have been reported in two ST-3 returns for the first time when the amount was billed i.e., in fourth row in item 4(A) of ST-3 return and a second time i.e., in the first row in item 4(A) of ST-3 Return when the amount was realised - if the main contractor has paid service tax, the sub-contractor need not pay tax again on the same service, for periods prior to introduction of Cenvat Scheme is reasonable and acceptable based on the Board s circulars, for maintaining equality before law - Decided in favour of the assessee by way of remand to adjudicating authority
Issues Involved:
1. Liability of sub-contractors to pay service tax. 2. Eligibility for exemption under Notification 12/2003-ST. 3. Time-bar of the demand under section 73 of the Finance Act, 1994. Detailed Analysis: 1. Liability of Sub-Contractors to Pay Service Tax: The Appellant contended that as a sub-contractor, they were not liable to pay service tax, relying on CBEC Circular F. No. B-11/3/98-TRU, dated 7-10-1998, and various case laws. The Tribunal examined the issue, noting that initial clarifications issued by the Board were based on the policy to tax the same service only once, typically in the hands of the main service provider. However, the Tribunal found no circular laying down a principle that sub-contractors are universally exempt from paying service tax without conditions. The liability to tax must be decided based on the definition of the concerned taxable service and the activities carried out. The Tribunal acknowledged that if the main contractor, HAL, had paid the service tax, the sub-contractor (Appellant) would not be liable to pay tax again. Since no evidence was presented that HAL had discharged the service tax liability, the demand on the sub-contractor stood, subject to verification of such evidence if produced. 2. Eligibility for Exemption under Notification 12/2003-ST: The Appellant argued that they were eligible for exemption under Notification 12/2003-ST for the value of materials supplied, which was not considered by the Commissioner (Appeals). The Tribunal referred to the Apex Court decision in Share Medical Care v. Union of India, which allows claiming exemptions at any stage of the proceedings. The Tribunal found that the Commissioner (Appeals) erred in not considering the Appellant's claim for exemption when evidence regarding the value of goods sold was presented. The case was remitted to the adjudicating authority to re-examine the claim for exemption under Notification 12/2003-ST, allowing the Appellant to produce fresh evidence. 3. Time-Bar of the Demand under Section 73 of the Finance Act, 1994: The Appellant argued that the demand was time-barred as the Show Cause Notice (SCN) was issued beyond one year from the date of the invoices. The department contended that the relevant date should be when the payment was received, not when the invoices were issued. The Tribunal analyzed the provisions of section 73 of the Finance Act, 1994, and concluded that the relevant date for issuing the SCN should be from the date of realization of the amount, not the billing date. The Tribunal reasoned that under the scheme of service tax levy, tax is to be paid when the value is realized, and short payment occurs at that point. Therefore, the SCN issued within one year from the date of realization was valid, and the demand was not time-barred. Conclusion: The Tribunal set aside the impugned order and remitted the case to the adjudicating authority for re-examination in light of the observations made. The adjudicating authority was directed to consider the Appellant's arguments, allow the production of fresh evidence, and decide on the eligibility for exemption under Notification 12/2003-ST. The Tribunal also clarified that the relevant date for issuing the SCN should be based on the realization of the amount, not the billing date, rejecting the Appellant's contention of time-bar. The appeal was disposed of accordingly.
|
