2024 (5) TMI 1277 - AT - Service Tax

Non-payment of service tax - Penalty based on show cause notices - consideration received on mobilization advance - services provided as a sub-contractor - HELD THAT - This appeal, as noticed, arises out of two subsequent show cause notices dated 24.05.2013 and 07.08.2015 for the subsequent period and it is pointed out by learned counsel for the appellant that the show cause notices are based on the same allegations as are contained in the first two show cause notices that were the subject matter of the order passed by the Tribunal. It is, therefore, submitted by the learned counsel for the appellant that an order in the same terms as earlier passed by the Tribunal 2017 (12) TMI 386 - CESTAT NEW DELHI held that ''The mobilization advance is liable to be service tax, as the provisions of Section 67 are clear to the effect that any money received for the taxable service to be provided is to be taxed at the time of receipt itself. The appellants, though claimed to have discharged the service tax later, subject to verification of the same, the liability for the interest on the late payment will arise'' Thus, for the reasons stated by the Tribunal in the decision dated 06.10.2017, the order dated 31.03.2017 passed by the Commissioner is set aside.

Summary

Issues involved: Adjudication of service tax demand with penalty based on show cause notices for non-payment of service tax as contractor and sub-contractor, subsequent appeal challenging Commissioner's order.

In this case, the appellant, engaged in fabricating and installing aluminum doors/windows panels, received mobilization advance but did not discharge the service tax liability. The appellant also did not pay service tax as a sub-contractor. Two show cause notices were issued, adjudicated by the Commissioner, and later appealed. The Tribunal allowed the appeals by remand, directing a fresh decision by the Adjudicating Authority. The Tribunal emphasized the need to verify the nature of work executed and tax liability u/s Section 67. The order dated 31.03.2017 by the Commissioner was set aside, and the matter was remitted for a fresh decision within three months.

The Tribunal's decision on 06.10.2017 highlighted the importance of examining the nature of work executed by the appellant and the tax liability. The mobilization advance received was deemed liable for service tax, emphasizing the timing of taxation as per Section 67. The Tribunal stressed the need to verify the appellant's claim of discharging service tax later and the interest on late payment. The classification of tax liability as a sub-contractor was to be re-evaluated, considering the main contractor's tax payment and related issues. The Tribunal set aside the impugned order, remanding the matter for a fresh decision with adequate opportunity for the appellant to present their case.

The subsequent appeal, based on show cause notices for a later period, raised similar allegations as the earlier notices. The appellant requested an order similar to the Tribunal's decision on 06.10.2017. The authorized representative for the department acknowledged the similarity of the issues with the earlier appeals. Consequently, the Commissioner's order dated 31.03.2017 was set aside, and the matter was remitted to the Adjudicating Authority for a prompt fresh decision, preferably within three months from the date of the order.