2008 (3) TMI 131 - AT - Service Tax

Security services appellant submits that he is a sub-contractor & as per the agreement, the main contractor was required to pay the service tax - Since the service tax stands paid already by the main contractor, there was no question of demanding again from the appellant and the question of demand of interest and imposition of penalty also does not arise commissioner neither considered decision relied upon by the appellants nor considered that main contractor has paid tax matter remanded

Summary

Issues:
1. Liability of sub-contractor to pay service tax for security services provided.
2. Applicability of penalties under Section 78, 75, and 76 of the Finance Act, 1994.
3. Interpretation of agreements between main contractor and sub-contractor regarding service tax payment.
4. Relevance of circulars and trade notices in determining tax liabilities.
5. Consideration of previous judgments in similar cases.

Analysis:
1. The case involves the confirmation of service tax against the appellant for providing security services to a main contractor. The appellant argues that since the main contractor had already paid the service tax, there should be no demand on the sub-contractor. The appellant relies on agreements and trade notices to support their position, emphasizing that the situation should be revenue neutral.

2. Penalties under Section 78, 75, and 76 of the Finance Act, 1994 were imposed on the appellant. The appellant contests these penalties, stating that since the main contractor had paid the service tax, there should be no imposition of penalties on the sub-contractor. The Tribunal directs the Commissioner to re-consider the issue in light of the appellant's arguments and previous decisions.

3. The Tribunal notes that the Commissioner did not adequately consider the appellant's arguments regarding the main contractor's payment of service tax. The Tribunal emphasizes the need for a fresh decision by the Commissioner, taking into account the agreements between the main contractor and sub-contractor regarding service tax payment.

4. The authorized Departmental Representative argues that the sub-contractor is independently liable to pay service tax, citing a circular clarifying this point. The Representative asserts that the judgments relied upon by the appellant are not applicable to the case at hand, as they dealt with different services. The Tribunal directs the Commissioner to re-examine the issue considering all relevant factors.

5. The Tribunal acknowledges the decisions cited by the appellant, emphasizing that the Commissioner should have discussed them in the original decision. The Tribunal sets aside the impugned order and remands the matter to the Commissioner for a fresh decision, considering the arguments presented by both parties and the relevant legal precedents.

This detailed analysis covers the various issues raised in the judgment, providing a comprehensive overview of the arguments presented by the parties and the Tribunal's directions for further consideration by the Commissioner.