2016 (9) TMI 489 - AT - Service Tax

Demand of service tax from sub-contractor - Site Formation Service and Mining Services since 2007-2008 - hiring of equipment for excavation, loading of Coal/OB at Pit No. of Dongamouha Open Case Coal mines of M/s Jindal Steel Power Projects Ltd. (JSPL) and transporting the same to JSPL s crushing plant/OB Dump within distance of 3 km from the edge of the quarry and unloading of coal in the JSPL s hopper as would be directed by GSA - Held that - by relying on the decision of Tribunal in the case of Vijay Sharma & Co. 2010 (4) TMI 570 - CESTAT, NEW DELHI and the decision of Hon ble Supreme Court in the case of M/s. Hindustan Coca Cola Beverage Pvt. Ltd 2007 (8) TMI 12 - SUPREME COURT OF INDIA , we hold that the payment made by main contractor on the activity conducted by the appellant is considered as discharge of service tax liability by the appellant. Further we find that the payment made by the main contractor has not been disputed by Revenue. In that circumstances, we hold that the payment of main contractor on behalf of the appellant shall be treated as payment made by the appellant. We further hold that in the light of the Section 97 of the Finance Act, 2012, the appellant is not liable to pay service tax on the activity of maintenance & repair roads, therefore, demand on this account is also set aside. The matter is remanded back to the adjudicated authority for verification purposes whether the appellant paid service tax for the remaining part of the services tax demand. If the same is found to correct, no demand shall be sustainable against the appellant. - Appeal disposed of

Summary

Issues:
Demand of service tax for site formation service and mining services provided by the appellant without payment of service tax.

Analysis:
The appellant entered into a sub-contract for overburden removal/coal excavation with a main contractor. The Revenue alleged that the appellant provided Site Formation Service and Mining Services without paying service tax. The appellant argued that the main contractor discharged the service tax liability on their behalf, citing legal precedents. The appellant contended that they are not liable to pay service tax for maintenance & repair of roads as per Section 97 of the Finance Act, 2012. The appellant requested a remand to verify the payment of service tax for the remaining liability. The Revenue opposed, claiming the appellant is liable to pay service tax. The Tribunal found that the main contractor's payment on behalf of the appellant should be considered as payment by the appellant, based on legal principles. The Tribunal also held that the appellant is not liable to pay service tax for maintenance & repair of roads. The matter was remanded to verify the payment of service tax for the remaining demand. The adjudicating authority was directed to provide an opportunity for document verification and pass an appropriate order accordingly.

In conclusion, the Tribunal disposed of the appeal by setting aside the demand for service tax on maintenance & repair of roads and remanding the matter for verification of the remaining service tax payment. The Tribunal emphasized the need for a fair verification process and compliance with legal provisions in reaching a final decision.