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2017 (7) TMI 449 - AT - Service TaxSub-contract - taxability in hands of sub-contractor - penalty - the main submission of the appellant is that they being a sub-contractor to the main contractor, they are not liable to pay service tax - Held that: - the main contractor are provider of construction service whereas the appellant is providing an independent service of excavation for which they are the main service provider and hence, they are not entitled for the benefit as a sub-contractor - the service provided by the appellant chargeable to service tax in their own hand - demand upheld. The appellant have rightly claimed the cum-tax benefit available in principle and the same is admissible to them - As regard the interest amount of admittedly paid by the appellant, the same is rightly adjustable against the total demand. Penalty u/s 78 - Held that: - the substantial amount of service tax was paid by the appellant along with interest during the proceedings before the adjudicating authority - the penalty imposed u/s 78 is not legal and proper - penalty imposed u/s 78 invoking the provisions of Section 80 of the FA, 1994. Appeal allowed - decided partly in favor of appellant.
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