TMI Blog2024 (3) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... of service tax by the sub-contractor, when the main contractor pays service tax on the gross value. Later, the Board issued a further clarification vide Circular No. 96/7/2007-ST dated 23.08.2007, clarifying that sub-contractors are liable to pay service tax even if the main contractor pays service tax on the gross value. This Circular, being oppressive in nature towards the sub-contractors, can be applied only prospectively as held by the Hon ble Supreme Court in the case of SUCHITRA COMPONENTS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, GUNTUR [ 2007 (1) TMI 4 - SUPREME COURT] - for the demand of Rs.38,16,593/- confirmed under Dredging Services rendered by the Appellant as a sub-contractor pertaining to the period 2005-06 and 2006-07, it is held that the demand confirmed in the impugned order is not sustainable. Levy of service tax - dredging services undertaken by the Appellant in the river Daya and at the lagoon of Chilka lake, as a sub-contractor - HELD THAT:- The said demand has been raised for the period 2008-09 to 2011-12. It is also observed that all the amounts received by the Appellant for the dredging services rendered have been recorded in their books of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d facts of the case are that the Appellant had realized Rs.3,99,90,555/- on account of providing 'Dredging Service' during the period 2005-06 to 2006-07 as a sub-contractor of M/s. MBL Ltd. and not discharged service tax of Rs.38,16,593/- (including cess). During the period 2005-06 to 2009-10, the Appellant was liable to pay service tax of Rs.1,74,608/-(including cess) in respect of 'Construction Service' rendered and Rs.92,828/- (including cess) towards Goods Transport Agency Service (as noticed by the ld. adjudicating authority in the Order-in-Original dated 14.09.2012). As the Appellant has not paid service tax on all these services, a Show Cause Notice dated 19.10.2010 was issued to the appellant inter alia proposing demand of service tax. Accordingly, service tax of Rs.40,84,029/- was confirmed by the adjudicating authority vide Order-in-Original No. 37/ADC/ST/KOL/2012-13 dated 14.09.2012. On appeal, the ld. Commissioner (Appeals) upheld all the demands vide the impugned Order-in-Appeal No. 84/ST-II/KOL/2016-17 dated 06.07.2016. An amount of Rs.17,917/- paid by the Appellant towards their service tax liability on Goods Transport Agency service has also been a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med under Dredging Service in this case (Appeal No. ST/76699/2016) pertains to the period 2005-06 and 2006-07, the demands confirmed in the impugned order on 'Dredging Services' is not sustainable. 4.1 The Appellant has not contested the remaining demands of service tax of Rs.1,77,608/- (including cess) in respect of Construction Service and Rs.92,828/- (including cess) towards Goods Transport Agency Service . 4.2 Regarding the demand of service tax of Rs.1,15,68,852/- (Appeal No. ST/76349/2014), the Appellant submits that the said demand was raised for alleged dredging in Chilka lake and in the river Daya as a sub -contractor. They contended that there is no service tax leviable on dredging in the lagoons of Chilka lake . They cited the Circular F. No. B1/6/2005-TRU dated 27.07.2005 issued by Board, wherein it has been clarified that service tax is leviable only on dredging of river, port, harbour, backwater or estuary and dredging in any other case does not attract service tax; in the present case, major part of the dredging works undertaken by them were related to the Chilka lagoon/lake, which is not liable to service tax. They also submit that the demands ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments. 7. Regarding the demand of service tax of Rs.40,84,029/-, we observe that the Appellant has undertaken the 'Dredging Services' as a sub-contractor to the main contractor viz. M/s MBL. The contention of the Appellant is that as the main contractor M/s. MBL has discharged service tax on the gross amount received by them towards the whole amount received rendering of 'Dredging Services', they are not liable to pay service tax again for the 'Dredging Service' as a sub-contractor. In this regard, we observe that the Department had also earlier clarified that the sub-contractor is not liable to pay service tax when the main contractor pays service tax on the gross value received for the services rendered. Thus, we observe that there were confusions regarding the liability for payment of service tax by the sub-contractor, when the main contractor pays service tax on the gross value. 7.1 Later, the Board issued a further clarification vide Circular No. 96/7/2007-ST dated 23.08.2007, clarifying that sub-contractors are liable to pay service tax even if the main contractor pays service tax on the gross value. We observe that this Circular, being oppressi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Notice demanding service tax for the period 2005-06 and 2006-07 for the same dredging service and hence, extended period could not be invoked again to demand service tax on the same issue, as held by the Hon'ble Apex Court in the case of Nizam Sugar Factory v. Collector of Central Excise, A.P. [2006 (197) E.L.T. 465 (S.C.)]. 8.1 We observe that a Show Cause Notice dated 19.10.2010 had already been issued to the Appellant demanding service tax on 'Dredging Service' for the period 2004-05 and 2005-06. Later, on 14.01.2011, the Appellant has taken centralized registration at Kolkata, including their activities in Odisha. We observe that the said demand has been raised for the period 2008-09 to 2011-12. We also observe that all the amounts received by the Appellant for the dredging services rendered have been recorded in their books of accounts, i.e., in the Balance Sheet and Profit Loss Account. The figures mentioned in the statutory records are not challenged by the Department. The Notice has not brought in any evidence to substantiate the allegation of suppression of any information on the part of the Appellant. Moreover, the 'Dredging Service' rendered by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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