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TMI Blog2024 (9) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... r receiving the certified copy of this order. - MR. S. S. GARG, MEMBER (JUDICIAL) AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri Sagar Verma and Shri Dinesh Verma, Advocates for the Appellant Shri Pawan Kumar, Authorized Representative for the Respondent ORDER The present appeal is directed against the impugned order dated 19.08.2013 passed by the Commissioner of Central Excise, Rohtak, whereby he has confirmed the demand of service tax amounting to Rs. 97,51,174/- by invoking the extended period of limitation under Section 73 of the Finance Act along with interest and also imposed equal penalty under Section 78 of the Finance Act and a penalty of Rs. 5,000/- imposed under Section 77 of the Finance Act, 1994. 2. Briefly the facts of the present case are that the appellant is a sub-contractor and providing services to the Principal/Main contractors i.e. M/s L T, New Delhi and not to the ultimate customers. The appellant is primarily undertaking the Commercial or Industrial Constructions works on subcontract basis which is subcontracted to them by the Principal contractors M/s L T etc. and service tax leviable on such services are not charged by the appellant from their Principal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithdrawn the earlier stand and clarified that the sub-contractor is liable to pay service tax. He further submits that even after the CBEC s master circular. There were decisions to that effect that when the main contractor has paid the service tax then the sub-contractor was not required to pay the service tax. For this submission, he relies upon the following decisions: Visesh Engineering Co. v. Commissioner of Customs, Ex. S.T., Guntur, 2016 (43) S.T.R. 232 (Tri.-Hyd.) Thadi Satya Ramalinga Reddy v. CCE, S.T. Cus. 2017 (4) G.S.T.L. 421 (Tri.-Hyd.) Power Mech Project Ltd. v. Commissioner of Customs, Guntur, 2017 (48) S.T.R. 165 (Tri.-Hyd.). 4.3 He further submits that the matter was referred to the Larger Bench because there were contrary decisions of various Benches and the Larger Bench in the case of Commissioner Vs. Melange Developers (P.) Ltd. reported in 2020 (33) G.S.T.L 116 (Tri.-L.B.) settled the law on the issue of payment of service tax by the sub- contractor. As per the ratio of the said decision, the sub-contractor is liable to pay service tax even when the main contractor has discharged the service tax on the entire value of the contract. 4.4 Ld. Counsel further subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o take credit of such Service Tax paid by the appellant as these are input services for the main contractor. This issue is no longer res integra and is settled by the decision of the Larger Bench of the Tribunal in the case of Commr. of S.T., New Delhi v. M/s. Melange Developers Pvt. Ltd. reported in 2020 (33) G.S.T.L. 116 (Tri. CB). It was observed as under: 15. It is not in dispute that a sub-contractor renders a taxable service to a main contractor. Section 68 of the Act provides that every person, which would include a sub-contractor, providing taxable service to any person shall pay Service Tax at the rate specified. Therefore, in the absence of any exemption granted, a sub-contractor has to discharge the tax liability. The service recipient .e. the main contractor can, however, avail the benefit of the provisions of the Cenvat Rules. When such a mechanism has been provided under the Act and the Rules framed thereunder, there is no reason as to why a sub-contractor should not pay Service Tax merely because the main contractor has discharged the tax liability. As noticed above, there can be no possibility of double taxation because the Cenvat Rules allow a provider of output se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn are paying certain amount to the appellants to get the services in these ICDs. In such situation, there is a clear possibility for a bona fide belief that as the whole amount has been subjected to service tax the amount received by the appellant may not be liable to service tax in connection with the services 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 eva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssionerate clarifying that where the principle service provider discharged his service tax liability on the entire value of the services, a separate liability cannot be imposed against the sub-contractor. The said Circulars stands taken note of by the Tribunal in various judgments and its stand held that where the entire service tax has been paid on the full consideration of the services, the sub-contractors' liability would not arise to pay service tax again on the part of principle service. One such reference can be made by following circulars: TRU letter F. No. 341/18/2004-TRU (Pt.) dated 17-12-2004 -Circular No. 23/3/97-5.T., dated 13-10-1997 - Master Circular No. 96/7/2007-ST dated 23-8-2007 In fact, also from various following decisions of the Tribunal:- - Urvi Construction v. CST, Ahmedabad 2010 (17) S.T.R. 302 (Tri. Ahmd.) = 2009- TIOL-1890-CESTAT-AHM -CCE, Indore v. Shivhare Roadlines - 2009 (16) S.T.R. 335 (Tri.- Del.) =2009-TIOL-526-CESTAT-DEL - Harshal Company v. CCE, Vadodara - 2008 (12) S.T.R. 574 (Tri.- Ahmd.) - Semac Pvt. Limited v. CCE, Bangalore-2006 (4) S.T.R. 475 (Tri.- Bang.) 2006-TIOL- 1546-CESTAT-BANG - Shiva Industrial Security Agency v. CCE, Surat - 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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