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2023 (12) TMI 1305 - AT - Service TaxLiability of appellant (sub-contractor) to pay service tax - service tax has been paid by the main contractor on the whole contract value - difference of opinion - HELD THAT:- Section 65(7) of the Finance Act 1994 defines “assessee” as a person liable to pay the service tax and includes his agent. Rule 2(1)(d) of Service Tax Rules 1994 defines “person liable for paying service tax”. As per the said Rule, in respect of services other than in Rule (2)(1)(d)(i), it is the provider of service who is the person liable to pay service tax. When the law fixes the liability to pay tax on a particular person, the parties cannot mutually agree to absolve from liability or shift the liability to another. The activity of providing a taxable service being the taxable event, the subcontractor cannot escape the liability even though the main contractor has paid his part of the liability on the gross amount charged. As already stated as the main contractor being eligible to avail Cenvat Credit there is no situation of double taxation. The Tribunal in very recent decisions as pointed by the Department has followed the decision in the case of Melange Developers Ltd. [2019 (6) TMI 518 - CESTAT NEW DELHI-LB], to hold that the sub-contractor is liable to pay service tax even if the main contractor has discharged service tax on the contract value. Judicial propriety makes it binding to follow the Larger Bench decision in order to reduce conflict of decisions - the decision of Larger Bench in the case of Melange Developers & Co. would apply. The view taken by brother Member (Technical) is agreed upon and it is held that the Appellant is liable to pay service tax on the value of sub-contract/work done inspite of the fact that the main contractor has discharged the service tax on the whole contract value. The reference is answered and the difference of opinion stands resolved - papers may be placed before the Division Bench for deciding the appeal.
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