9911796707
TMI Blog2017 (9) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... nt like BHEL, ALSTOM, etc. Demand proceedings were Initiated against the appellant for non-payment of Service Tax, on their activities during the period 01.07.2003 to 31.03.2007. The demand was issued on 28.04.2008. The case was adjudicated resulting in the impugned order. The original authority confirmed Service Tax liability of Rs. 1,08,18,323/- and imposed equal amount of penalty under Section 78 of Finance Act, 1994. A further penalty of Rs. 5,000/- under Section 77 was also imposed. 2. The ld. Counsel appeared for the appellant submitted that the appellant were providing services to the main contractors in the capacity of sub-contractor. Based on various clarifications issued by the Board as well as the field formations, they were und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that the appellants were providing a taxable service during the material time, is not in dispute. However, they contested their liability to pay service tax only on the ground that the main contractor paid service tax on the full value which included the part of the consideration they received for the sub-contracted work. The demand was also contested on the limitation in view of the then prevailing clarifications and bonafide belief based on such clarifications. We have examined the impugned order carefully. We note that while the tax likability of the appellant is not seriously contested, the question for examination is the application of limitation for the demand confirmed in the impugned order. The original authority in para 3.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended period, we note that the original authority recorded that the submissions made by the appellant regarding payment of service tax by the main contractor is not convincing. He held that as the appellants were aware of their liability, the extended period is invokable. We find that the reasoning recorded in the impugned order do not fully justify the basis for a demand with extended period. The clarifications issued and decisions of the Tribunal did give room for bonafide belief for non-tax liability of a subcontractor. Accordingly, we hold the demand of service tax is to be restricted to normal period with no liability to penalties. 5. In view of the above discussion and analysis, we allow the appeal partly as stated above. (Pronounc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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