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TMI Blog2023 (10) TMI 1091X X X X Extracts X X X X X X X X Extracts X X X X ..... he first circular the board has clarified where the service is provided by the sub-contractor, the main contractor on whose behalf service is provided, is liable to pay the Service Tax and sub-contractor is not liable to pay Service Tax - However, later on taking U-turn, the board has clarified that the sub-contractor being independent service provider in any case is required to pay the Service Tax. Therefore, due to lack of clarity on the issue during relevant time and the issue being finally decided by the Larger Bench, no mala fide intention to evade payment of Service Tax can be attributed to the appellant. In the present case, since the service provision is during period September 2004 to April 2008, the SCN issued on 18.10.2009, the entire period is beyond normal period and hence the demand for the said period is not sustainable on the ground of time bar. This issue particularly on the ground of time bar has been decided in PRAMUKH EARTH MOVERS VERSUS C.C.E. S.T. -VAPI [ 2023 (8) TMI 851 - CESTAT AHMEDABAD] where it was held that the entire demand being issued for extended period i.e. beyond one year from the date of show cause notice shall not sustain on limitatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here the service was provided by the sub-contractor whether the sub-contractor is liable to pay Service Tax was under dispute in various cases and finally the same was decided by the Larger Bench in the case of Melagne Developers Pvt Ltd (supra). Moreover, on the issue of taxability on the sub-contractor, there were contrary board circulars, in the first circular the board has clarified where the service is provided by the sub-contractor, the main contractor on whose behalf service is provided, is liable to pay the Service Tax and sub-contractor is not liable to pay Service Tax. However, later on taking U-turn, the board has clarified that the sub-contractor being independent service provider in any case is required to pay the Service Tax. Therefore, due to lack of clarity on the issue during relevant time and the issue being finally decided by the Larger Bench, no mala fide intention to evade payment of Service Tax can be attributed to the appellant. Therefore, in the present case, since the service provision is during period September 2004 to April 2008, the SCN issued on 18.10.2009, the entire period is beyond normal period and hence the demand for the said period is not sustain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. 16. In Jaiprakash Industries Ltd. vs. Commissioner of Central Excise, Chandigarh, the Supreme Court held that when there are divergent views of High Courts, there can be a bona fide doubt as to whether the activity would amount to manufacture and in such circumstances it cannot be urged that there was misstatement or suppression of facts with intent to evade payment of duty. 17. In Commissioner of Central Excise, Vapi vs. Kolety Gum Industries', the Supreme Court held that when there are conflicting judgments of the Tribunal, the assessee may have a bona fide belief that service tax is not payable and in such a situation, the extended period of limitation cannot be invoked by the Department. 18. In Continental Foundation Joint Venture vs. Commissioner of Central Excise, Chandigarh, the Supreme Court held that when there is a scope for entertaining a doubt about the view to be taken, the extended period of limitation cannot be invoked. 19. The finding, therefore, that has been recorded by the Principal Commissioner for denying the invocation of the extended period of limitation does not suffer from any illegality. 20. in this view of the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices rendered by them. The issue involved has been a subject matter of interpretation by the Tribunal and High Courts. In fact the earlier Circular issued by the Board, covering the period prior to the introduction of Cenvat Credit Rules gave an impression that when the main service provider discharged the service tax on gross value there may not be tax liability on the sub-contractor rendering similar service to the main contractor. The Tribunal in various cases held in such a case involving interpretation of law and also a bona fide belief regarding service tax liability, will not attract the demand for extended period. We also take note that service tax liability on the appellant when discharged will be available as a credit to RSIC which can be used by RSIC for discharging their overall service tax liability. As such, to impute motivation to the appellant for intention to evade payment of duty is not sustainable. A reference can be made to the Tribunal s decisions in British Airways v. CCE (Adjn.), Delhi reported in 2014 (36) S.T.R. 598 (Tri. - Del.), Atul Ltd. v. CCE, Surat-II reported in 2009 (237) E.L.T. 287 (Tri. - Ahmd.). In the facts and circumstances of this case, we f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n including Service Tax from the clients, which is clear from the records. Appellants from the very beginning have raised the contention that they were instructed by M/s. ACL that they are not required to pay the Service Tax. We cannot find any factual basis for invoking the extended period. 9.3 We therefore hold that the demand raised by invoking the extended period cannot be sustained and requires to be set aside, which we hereby do. 10. From the discussions, we hold that the appeal fails on merits. However, we hold that the demand for the extended period of limitation, if any, cannot sustain and the impugned order to this extent is set aside, without disturbing any demand that falls within the normal period. For the same reasons, we find that the penalties cannot sustain. We set aside the same. The appellant succeeds on the ground of limitation only. 11. The appeal is disposed of on above terms. In the case of M/s. Vishal Engineering Company (Supra) Chandigarh Tribunal has passed the following order: 11. Further, we find that the issue whether in such cases extended period of limitation can be invoked or not was also considered by various benches ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the appellant for intention to evade payment of duty is not sustainable. A reference can be made to the Tribunal's decisions in British Airways v. CCE (Adjn.), Delhi reported in 2014 (36) STR. 598 (Tri. - Del.). Atul Ltd. v. CCE. Surat-Il reported in 2009 (237) E.LT. 287 (Tri- Ahmd.). In the facts and circumstances of this case, we find that the demand for extended period is not sustainable. We have also perused the reasons recorded by the Original Authority for invoking extended period of demand. He recorded that but for the Department's investigation the nonpayment of tax would not have come to the notice. Further, the balance sheet for certain years have not been furnished in time by the appellant which was obtained from Registrar of Companies. As such, it was held that the appellants wilfully suppressed material facts. We find that the service tax demand against the appellant was sought to be confirmed mainly on the basis of the terms of agreement between the appellant and RSIC. The gross receipt of RSIC and service tax payment thereupon is available with the Department. A portion of that receipt is now being taxed under BIS at the hands of the appellant. The ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L1546- CESTAT-BANG -Shiva Industrial Security Agency v. CCE, Surat 2008 (12) S.T.R. 496 (Tri-Ahmd.) -Synergy Audio Visual Workshop P. Ltd. v. CST, Bangalore 2008 (10) STR. 578 (TriBang)= 2008-TIOL- 809-CESTAT-BANG -OIKOS v. CCE, Bangalore 2007 (5) S.T.R. 229 (Tri- Bang)= 2006-TIOL-1760-CESTATBANG In the Tribunal's decision in the case of OIKOS v. CCE. Bangalore - III reported in 2007 (5) S.T.R. 229 confirmed against the sub-contractor. To the similar effect the Tribunal decision in the case of Viral Builders v. CCE, Surat reported in 2011 (21) S.TR. 457 (Tri- Ahmd.) =2010-TIOL-1575- CESTAT- AHM observed that service stands provided only once and as such tax is not payable twice for the same service. Further in the case of Sunil Hi-Tech Engineers Ltd. v. CCE, Nagpur reported in 2010 (17) S.T.R. 121 (Tri-Mumbai) 2009- TIOL-1867-CESTAT-MUM, the service tax confirmed against the sub-contractor was set aside on the ground that the main contractor has already paid the Service Tax and the matter was remanded to verify the above effect. The same ratio was laid down by the Tribunal in the case of Newton Engg Chemicals v. CCE, Vadodara reported in 2008 (12) S.TR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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