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2024 (5) TMI 807 - AT - Service TaxLiability of appellant, as a sub-contractor, to pay Service Tax when the main contractor has paid Service Tax on the services rendered - Consulting Engineer Service - services of supervision, coordination and monitoring in respect of engineering and technical works under the Yamuna Action Plan Project - extended period of limitation - penalty - HELD THAT - The appellant has rendered the services to M/s. Tokyo Engineer Consultants Co. Ltd. as a sub-contractor. It is on record that the main contractor has paid Service Tax on the entire bill amount. However, it is observed that the Board has issued the Circular dated 23.08.2007 wherein it has been clarified that a sub-contractor is liable to pay Service Tax separately even if the main contractor discharges Service Tax on the entire amount. Accordingly, the appellant is liable to pay Service Tax on the services rendered by them as a sub-contractor. Invocation of the extended period of limitation - HELD THAT - The appellant cannot be faulted for not paying Service Tax for the period prior to the issue of the clarification by the Board. Further, the entire issue was within the knowledge of the Department and there is no evidence brought on record to establish suppression of facts with intention to evade payment of tax on the part of the appellant. Accordingly, the extended period of limitation cannot be invoked to demand duty in this case. In the case of M/S SHREE RANIE GUMS CHEMICALS PVT. LTD., M/S JAINSONS (INDIA) INDUSTRIES, M/S BASANT, M/S SATYAM ENTERPRISES (UNIT I) AND M/S SHREE RAM GUM CHEMICALS LTD. VERSUS CCE, JAIPUR-II 2017 (5) TMI 1303 - CESTAT NEW DELHI , this Tribunal has held that the demand raised by invoking the extended period includes normal period of limitation within it. Thus, when it is held that the extended period of limitation is not invokable, the demand for the normal period of limitation survives. Penalty - HELD THAT - It is observed that no suppression of facts with intention to evade payment of Service Tax exists in this case. Hence, in the facts and circumstances of the present case, no penalty is imposable on the appellant. The demand of service tax for the extended period of limitation is set aside. The demand, if any, for the normal period of limitation, is confirmed along with interest - No penalty is imposable on the appellant - appeal disposed off.
Issues involved:
The issue involved in the present appeal is whether the appellant, as a sub-contractor, is liable to pay Service Tax when the main contractor has paid Service Tax on the services rendered. Summary: Issue 1: Liability of sub-contractor to pay Service Tax The appellant provided services as a sub-contractor to the main contractor, who had paid Service Tax on the entire bill amount. The Circular dated 23.08.2007 clarified that a sub-contractor is liable to pay Service Tax separately, even if the main contractor has already paid. The Tribunal held that the appellant is indeed liable to pay Service Tax as a sub-contractor. Issue 2: Invocation of extended period of limitation The demand was raised for the period from April 2006 to March 2011 by invoking the extended period of limitation. The Tribunal observed that there were contradictory decisions during the relevant period regarding the liability of a sub-contractor. As there was no evidence of suppression of facts with intent to evade tax, the Tribunal held that the extended period of limitation cannot be invoked. Issue 3: Duty liability for the normal period of limitation The appellant argued that the demand for the normal period from October 2010 to March 2011 should have been issued by 25.04.2012. However, the Show Cause Notice was issued on 16.08.2012, within the eighteen-month time period for issuing the demand for the normal period of limitation. The Tribunal held that the demand for the normal period was valid and confirmed it along with interest. Conclusion: The Tribunal set aside the demand for the extended period of limitation, confirmed the demand for the normal period, and imposed no penalty on the appellant due to the absence of suppression of facts.
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