2017 (7) TMI 251 - AT - Service Tax

Sub-contract - time limitation - whether sub-contractor is required to pay service tax on the construction services when the main contractor for whom they are providing the services is discharging the service tax on the total value of the contract? - Held that - the Commissioner (Appeals) held that the extended period of limitation was unwarranted. From the ground of appeal, we find that the Revenue has not challenged by making any ground on the limitation, the appeal filed only on the merit. Therefore, the findings of the Commissioner (Appeals) on limitation which was not challenged, demand is not sustainable being time barred - we are of the view that the demand for the same period, how in once case is time barred and how in other case it is not time barred. The Commissioner (Appeals) has given a contrary view as regards the time bar. We, therefore, remand the matter (Appeal No.ST/86291/13) filed by the party to the Commissioner (Appeals) for re-consideration of the issue on limitation - appeal allowed by way of remand.

Summary

Issues involved:
Whether a sub-contractor is required to pay service tax on construction services when the main contractor is already paying the tax on the total contract value.

Analysis:
1. Revenue Appeal No.ST/85398/14:
- The Commissioner set aside the demand on both merit and time bar.
- The Revenue challenged the merit but not the limitation.
- The dropping of demand on limitation was final.
- The Revenue appeal was dismissed as it did not challenge the limitation.

2. Appellant's Appeal No.ST/86291/13:
- The demand in this appeal was for the same period as in the Revenue appeal.
- If demand for the same period is time-barred in one case, it cannot be invoked in another.
- The appellant argued that as a sub-contractor, they are not liable for service tax since the main contractor has paid it.
- The appellant cited circulars and various judgments to support their case.

3. Findings and Conclusion:
- The Commissioner held that the extended period of limitation was unwarranted.
- The Revenue's appeal was dismissed as it did not challenge the limitation.
- The demand for the same period in the appellant's appeal was considered time-barred.
- The matter of the appellant's appeal was remanded to the Commissioner for re-consideration on the issue of limitation.
- The judgment was pronounced on 14/6/2017 by Mr. Ramesh Nair, Member (Judicial).

This detailed analysis of the judgment highlights the key arguments presented by both parties, the Commissioner's findings on limitation, and the ultimate decision regarding the liability of the sub-contractor for service tax on construction services.