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2018 (8) TMI 2028 - CESTAT KOLKATAAlleged default in payment of service tax - service tax liability for the services was not paid by the appellant as a subcontractor - Commercial or Industrial Construction Services - Maintenance or Repair Service - Erection Fabrication & Commissioning service - Transport of Goods by Road service - demand of interest and penalty as well - invocation of extended period of limitation - HELD THAT:- By a Circular No.96/7/2007-S.T. dated 23.08.2007, with reference to Code 999.03/23.08.2007, it is clarified that a subcontractor is essentially a taxable service provider. The fact that services provided by such subcontractors are used by the main service provider for completion of his work does not in any way alter the fact of provision of taxable service by the subcontractor - Services provided by the subcontractors are in the nature of input services. Service tax is therefore, leviable on any taxable services provided, whether or not the services are provided by a person in his capacity as a subcontractor and whether or not such services are used as input services. The fact that a given taxable service is intended for use as input service by another service provider does not alter the taxability of the service provided - As the position was clarified by the revenue vide Circular No. 96/7/2007-S.T. dated 23.08.2007 that a subcontractor is obliged to pay service tax, irrespective of whether the main contractor has paid. It is categorically held that appellant will be liable to pay service tax as the subcontractor w.e.f. 23.08.2007. Extended period of limitation - penalty - suppression of facts or not - HELD THAT:- It is noticed that the respondent by letter dated 29.12.2008, had informed the department the entire facts. The law was clarified by the Board vide Circular dated 23.08.2007. The Circular dated 23.08.2007 was issued taking into consideration the report submitted by Shri T.R.Rustagi and the views and suggestions received from the trade and industry associations, departmental officers and other stakeholders, it is proposed to codify and issue a comprehensive circular on the technical issues. Thus, there is no suppression of facts with intent to evade payment of tax and therefore, extended period of limitation cannot be invoked. Similarly, the imposition of penalty under Section 78 is also not sustainable. The demand of service tax along with interest for the normal period of limitation and imposition of penalty under Section 76 is upheld - demand of service tax for the extended period of limitation and penalty under Section 78 of the Act are set aside - matter is remanded to the Adjudicating Authority to determine the quantum of demand, interest and penalty under Section 76 to the Act for the normal period of limitation in accordance with law - appeal allowed in part by way of remand.
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