2012 (4) TMI 457 - SUPREME COURT

Liability of service recipient to pay (reimburse) service tax to the server provider - the appellant deducted the service tax from the bills of the respondent - the appellant deducted 5% tax on the bills of the respondent for the period 30.11.1997 to 6.8.1999 – respondent refused to accept the deductions as they are not "Assessee" under the Service Tax Act- the Appellants are being recipients resisted and have filed the return, thus the appellant's obligation to pay the Service Tax and not that of the Respondents – Held that:- Since clause 9.3 of the contract refers to the liabilities of the contractor in connection with discharge of his obligations, one will have to refer to clause 6 of the "Terms and Conditions for Handling of Iron and Steel Materials of RINL, VSP" which was an integral part of the contract between the petitioner and the respondent, and which was titled "Obligations of the Contractor" - the said paragraph 6 deals in great details with the work which was required to be done by the respondent as clearing and forwarding agent. It is therefore absolutely clear that the term "his obligations under this order" in clause 9.3 of the contract denoted the contractor's responsibilities under clause 6 in relation to the work which he was required to carry out as handling contractor - the respondent as the contractor had to bear the service tax under clause 9.3 as the liability in connection with the discharge of his obligations under the contract and there was no reason for the High Court to interfere in the view taken by the arbitrator.