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2023 (12) TMI 952 - CESTAT CHENNAIIssuance of second SCN invoking extended period of limitation - Recovery of service tax alongwith interest and penalty - Manpower Recruitment or Supply Agency Service - HELD THAT:- The present SCN dt. 22.4.2013 has been issued for the very same period. The work sheet enclosed along with SCN in page 51 of the paper book shows that the figures for the present demand under MRSA service have also been obtained from ST-3 returns of the very same period filed by the appellant. It is brought out from these returns, that in the returns the appellant had declared exempted services for certain amounts. The present demand is raised under MRSA services and not WCS on the basis that these amounts shown as exempted are taxable under MRSA services as it involves supply of labour. The work orders issued by M/s.Comtech, M/s.Espee Tech & M/s.D.R Associates show that the work orders are for executing welding, fabrication works at site - the department would have come across the figures declared as ‘exempted services’, while perusing the ST-3 returns for issuing earlier SCN by invoking extended period. Therefore all information when available before the department a second show cause notice alleging suppression of facts cannot sustain. The department when equipped with all facts as declared in the ST-3 returns ought to have initiated proceedings on all grounds in the first SCN itself. In regard to work order issued by M/s.Comtech to the appellant for whom welding, fabrication for ship building works were carried out a letter dt. 03.07.2008 is issued by M/s.L&T Ltd. (customer) stating that the activity does not involve rendering of services and would fall under ‘manufacture’ as under Section 2(f) of Central Excise Act, 1994. So also, on perusal of the work orders, the activity rendered by the appellant for the other two customers appears to be identical - The appellant is a sub-contractor of M/s.Comtech, M/s.DR Associates and M/s.Espee Tech. The issue as to whether sub-contractor is liable to discharge service tax was under litigation. During the relevant period, The Board vide its Circular No.23/3/97-ST dt. 13.10.1997, TRU letter F.No.341/18/2004-(pt) dt. 17.12.2004 had clarified that sub contractor is not required to pay service tax. The second show cause notice issued invoking extended period on the basis of very same ST-3 returns filed by appellant cannot sustain and requires to be set aside - the SCN is time barred. The impugned order is set aside - Appeal allowed.
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