2016 (1) TMI 650 - AT - Service Tax

Taxability of sub-consultancy services provided to the main consultant - The appellant during adjudication took a categorical stand that the main consultant has discharged the service tax liability on the entire value of the contract and as such there is no legal liability on the assessee who is only a sub-consultant, to pay the service tax. - Held that - As such we find that the dispute revolves around the evidence required to be produced by the assessee to show that the main consultant had paid the service tax on the full value. As per the appellant the said evidence was produced before the original adjudicating authority, who has not adverted to the same. Ordinarily in the case of dismissal for non-compliance we would have remanded the matter to Commissioner (Appeals) but as in the present case documentary evidences are required to be examined and verified, we deem it fit to remand the matter to the original adjudicating authority. - Matter remanded back.

Summary

Issues: Dismissal of appeal for non-compliance with Stay Order, liability of sub-consultant for service tax, sufficiency of evidence regarding payment of service tax by main consultant.

In the judgment by the Appellate Tribunal CESTAT Bangalore, the issue revolved around the dismissal of the appeal due to non-compliance with the Stay Order issued by the Commissioner (Appeals). The appellant, a provider of Consulting Engineer Services, was registered with the department and paying service tax but had not paid service tax when providing sub-consultancy to the main consultant. The demand for service tax was raised on audit objection, leading to a dispute regarding the liability of the sub-consultant for the service tax. The appellant argued that the main consultant had already paid the service tax on the full value of the services, relieving the sub-consultant from the tax liability. However, this plea was not considered by the original adjudicating authority.

The Commissioner (Appeals), while passing the Stay Order, noted that the appellant had presented some evidence but deemed it insufficient to establish that the main consultant had indeed paid the service tax on the full value of the services. The crux of the matter lay in the evidence required to prove the payment of service tax by the main consultant. The appellant claimed that such evidence was submitted to the original adjudicating authority, who failed to consider it. Due to the necessity of examining and verifying the documentary evidence, the Tribunal decided to remand the matter to the original adjudicating authority instead of simply remanding it to the Commissioner (Appeals) in case of non-compliance. Consequently, the Stay petition and appeal were disposed of accordingly.