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TMI Blog2015 (8) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... ics Ltd. in respect of service provided by this main contractor to M/s. Asia Motor Works Ltd. was discharged by the main contractor M/s.Mahindra Logistics Ltd. and be further pleased to direct the respondents herein to consider payment of service tax liability by M/s.Mahindra Logistics Ltd. on the obligations subcontracted to the petitioner Company as due discharge of all liabilities arising upon the petitioner Company for the subcontracted portion. 1.02. The petitioner has also further prayed for appropriate Writ, of Mandamus or a Writ of Certiorari or any other appropriate writ, order holding and declaring that the amount due and payable by the petitioner Company for setting the false of Show Cause Notice No.V/ST/ST-AR-IIRajkot/ 204/Commr/2013 dated 7/10/2013 was Rs. 81,14,376/-, and upon payment of this amount with interest thereon, the case against the petitioner Company stands settled with all immunities allowed by the Customs, Central Excise and Service Tax Settlement Commission vide Order No.44/Final Order/ST/JL/2014 dated 23/3/2015 (Annexure "I"). 2.00. Facts leading to the present Special Civil Application in nutshell are as under :- 2.01. The petitioner is holding serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the category of "Tour Operator Service". It was also found that the petitioner noticee had rendered services to the value of Rs. 8,35,91,013/- to the SEZ unit during the period from financial year 2008-2009 to 2012- 2013 (upto December, 2012). It appeared during the course of the inquiry that the notices had not paid service tax of Rs. 9,19,19,223/-, education cess of Rs. 1,14,192/-, total amounting to Rs. 1,17,61,800/- and the same was required to be recovered under the proviso to section 73(1) of the Finance Act, 1994 along with the interest under section 75 of the Finance Act, 1994. It was also found that the petitioner had suppressed material facts from the department with intent to evade payment of service tax and therefore, contravened various provisions of the Act, as mentioned in the show cause notice and therefore they also rendered themselves liable to penalty under sections 76, 77 and 78 of the Finance Act. 2.06. Therefore, by show cause notice dated 7/10/2013, the petitioner noticee was called upon to show cause. as under :- "15. Now, therefore, M/s.Eagle Corporation Pvt. Ltd., "Eagle House" Eagle Chowk, Rajkot - the Noticee are hereby called upon to show cause t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.07. The petitioner Company submitted application on 12/5/2014 before the Settlement Commissioner in respect of case arising out of the above referred show cause notice dated 7/10/2013. The petitioner company deposited total sum of Rs. 81,14,376/- towards Service Tax liability and a further amount of Rs. 33,62,429/- towards interest. The petitioner paid for setting such a demand of service tax aggregating Rs. 5,45,824/- as regards services provided to M/s.Reliance Petrochemicals Limited (hereinafter referred to as "M/s.RPL" for short) in SEZ area, as according to the petitioner, the services provided to any SEZ unit was exempted by virtue of notification No.4/4/ST has frustrated by notification No.9/9/ST. The petitioner Company also paid for settling such a liability of Rs. 31,01,599/- in respect of service provided to M/s. Asia Motor Works Ltd. (hereinafter referred to as "M/s.AMW" for short), as the petitioner claimed that the petitioner Company was a sub-contractor and the service tax on the entire contract value was paid by M/s.Mahindra Logistics Ltd., who was the main contractor to M/s.AMW Ltd. 2.08. That during the course of the proceedings before the Settlement Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s.MLL has appointed the petitioner Company on back to back basis for carrying out the obligation of M/s.MLL in respect of provision of transportation facilities to the employees of M/s.AMW Ltd. It is submitted as per the conditions mentioned in the agreement dated 16/3/2008 between the petitioner Company and M/s.MLL, the petitioner was required to raise monthly invoices from M/s.MLL for transportation facilities for the employees of M/s.AMW Ltd. and that M/s.MLL shall make the payment to the petitioner Company for such amounts. It is submitted that as agreed, the petitioner Company was not to raise any bill to M/s.AMW Ltd., ultimate client receiving the services, but the bills on M/s.AMW Ltd. were to be raised by M/s.MLL as their contractor. It is submitted that in accordance with the said arrangement, the petitioner Company used to raise bills on M/s.MLL for the period in question. It is submitted that in turn M/s.MLL raised their bills to M/s.AMW Ltd. as regards the said business transaction, because M/s.MLL has been contractor for providing transportation services for the services of the said client. It is submitted that M/s.MLL in fact paid service tax to M/s.AMW Ltd. for prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue with respect to the demand of Rs. 5,45,824/- with respect to the services provided to M/s.RPL and Rs. 31,01,599/- with respect to the services provided to M/s.AMW Ltd. It is submitted that as the M/s.Mahindra Logistics Ltd. paid service tax in respect of the transportation facilities provided to M/s.AMW Ltd. 3.04. Mr.Paresh Dave, learned advocate appearing on behalf of the petitioner has heavily relied upon the following Circulars issued by the CBDT (sic) in support of his submission that even as per the said Circulars issued by the CBDT (sic), subcontractor is not liable to pay service tax despite the fact that the main contractor raises bill in favour of the recipient :- (1) Circular F.No.B.43/1/97-TRU dated 6/6/1997. (2) Circular No.43/5/97-TRU dated 2/7/1997. (3) Circular F.No.B.11/1/98-TRU dated 7/10/1998. (4) Circular No.138/7/2011-ST dated 6/5/2011. 3.05. Mr.Paresh Dave, learned advocate appearing on behalf of the petitioner has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Evergreen Suppliers Vs. Commissioner of Central Excise, Manglore, reported in 2008 (9) S.T.R. 191. 3.06. Mr.Paresh Dave, learned advocate appeari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder, the learned tribunal has set aside the tax liability of Rs. 5,45,824/- with respect to services provided to M/s.RPL provided in the SEZ. however, has confirmed the demand of service tax of Rs. 31,01,599/- with respect to services provided to M/s.AMW Ltd. It is the case on behalf of the petitioner that as the petitioner was the sub-contractor and M/s.Mahindra Logistics Ltd. was contractor to provide transportation services to Ms.AMW Ltd. and as M/s.MLL had paid service tax in respect of transportation services provided to Ms.AMW Ltd., the petitioner being sub-contractor, is not liable to pay service tax. However, it is required to be noted that there seem to be some misconception on the part of the petitioner that the petitioner is the sub-contractor with respect to transportation services provided to Ms.AMW Ltd. Mr.Dave, learned advocate appearing on behalf of the petitioner has placed before us copy of the agreement entered into between the petitioner and Mahindra & Mahindra Limited (hereinafter referred to as "MML") dated 16/3/2008 for perusal and considering the same, by no stretch of imagination, it can be said that the petitioner is subcontractor for providing transporta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MLL and in turn M/s.MM / M/s.MLL used to make the payment to the petitioner. During the aforesaid process, M/s.AMW Ltd. does not come into picture at all. Under the circumstances, by no stretch of imagination it can be said that the petitioner was a sub-contractor to provide transportation services to M/s.AMW Ltd. and that M/s.MM / MLL was the main contractor. 5.00. At this stage even some of the observations made by the Settlement Commission while passing the impugned order are required to be referred to. In para 10.5, the Settlement Commission has observed as under :- "10.5. The applicants have also provided tour operator service to another recipient. They had a written agreement with M/s.Mahindra Logistics Ltd. to supply buses directly to one M/s.Asia Motor Works Ltd. (M/s.AMW). The applicants have clarified at the time of hearing on 16/2/2015 that they had raised the bills for the services to M/s.Mahindra Logistics Ltd. and not on M/s.AMW. Hence, the service recipient in this case would be M/s. Mahindra Logistics Ltd. and not M/s.AMW. The applicants have further claimed that M/s.Mahindra Logistics Ltd. were the main contractors of M/s. MAW and that M/s. Mahindra Logistics Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the petitioner cannot be said to be a subcontractor for providing transportation services to M/s.AMW Ltd. There is an independent contract for providing transportation services / bus services, between the petitioner and M/s.MM / M/s.MLL and even between M/s.MM / M/s.MLL and M/s.AMW Ltd. 7.00. In view of the above, once it is held that the petitioner cannot be said to be a sub-contractor for providing transportation services to M/s.AMW Ltd., none of the aforesaid decisions and the Circulars issued by the CBDT relied upon by the learned advocate appearing on behalf of the petitioner, referred to hereinabove, shall be applicable to the facts of the case on hand. Under the circumstances, as such the impugned decision cannot be said to be in any way illegal and/or contrary to the provisions of the statute, which requires interference of this Court under Article 226 of the Constitution of India. 8.00. So far as the submission made on behalf of the petitioner that the proceedings before the Settlement Commission can be said to be an alternate to regular and normal adjudication proceedings is concerned, considering the provisions of the Act more particularly Section of Chapter V of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s vested with the appropriate authority. Therefore, technically speaking, proceedings before the Settlement Commission cannot be in strict-sense said to be an alternate to the adjudication proceedings, as sought to be contended on behalf of the petitioner. We have dealt with the aforesaid aspect as the learned advocate appearing on behalf of the petitioner has made submissions on the same and has vehemently submitted that the proceedings before the Settlement Commission is an alternate proceedings to normal adjudication by the appropriate authority. 9.00. In any case, as observed hereinabove, the petitioner cannot be said to be a sub-contractor with respect to the transportation services provided to M/s.AMW Ltd. and therefore, the contention on behalf of the petitioner that M/s.MM / M/s.MLL paid service tax on the transportation services rendered to M/s.AMW Ltd. and therefore, the petitioner is not liable to pay service tax and/or the contention that there shall be double taxation if the tax is recovered from the petitioner, has no substance and the same cannot be accepted. The service tax paid by M/s.MM / M/s.MLL with respect to transportation services provided to AMW is with re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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