2023 (9) TMI 523 - AT - Service Tax

Liability to pay Service Tax as a sub-contractor - main contractor discharged the liabilities on the full contract value - invocation of extended period of limitation - HELD THAT - The fact is not under dispute that on this issue of taxability on the sub-contractor, there were various conflicting judgments and finally the issue has been resolved by the larger bench in the case of COMMISSIONER OF SERVICE TAX VERSUS MELANGE DEVELOPERS PVT. LTD. 2019 (6) TMI 518 - CESTAT NEW DELHI , where it was held that It is not possible to accept the contention of the learned Counsel for the Respondent that a sub-contractor is not required to discharge Service Tax liability if the main contractor has discharged liability on the work assigned to the sub-contractor. Extended period of limitation - HELD THAT - Considering, the above facts this Tribunal in the various Judgments held that no mala fide intention can be alleged against the assessee, accordingly, held that demand for the extended period will not be sustainable - in the present case, the demand being beyond the normal period of limitation would not sustain on the ground of time bar alone. The impugned order set aside only on the ground of time bar - appeal allowed.

Summary

Issues involved:
Determining liability of sub-contractor to pay Service Tax when main contractor already paid, and whether extended period of limitation can be invoked.

The appellant, a sub-contractor, contested liability to pay Service Tax when the main contractor had already settled the tax on the full contract value. The issue was resolved by a larger bench in a previous case, confirming sub-contractor's liability. Appellant argued lack of mala fide intention and claimed the demand was time-barred.

In support, appellant cited various judgments including Thakarshi J Likhiya, Intermark Shipping Agencies, Laxmi Engineering, Sharma Decorators, Shanti Construction Co., Heena Enterprises, and MK Enterprise. These judgments held demands beyond the normal limitation period as unsustainable.

The revenue representative reiterated the findings of the impugned order, maintaining the liability of the sub-contractor.

After reviewing submissions and records, the Tribunal acknowledged conflicting judgments on the taxability of sub-contractors, which were resolved by the larger bench. Citing precedents, the Tribunal concluded that no mala fide intention could be attributed to the appellant, thus ruling the demand beyond the normal limitation period as unsustainable.

Decision:
The Tribunal set aside the impugned order solely on the ground of time bar, allowing the appeal.