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2023 (3) TMI 14 - AT - Service TaxLiability of appellant to pay service tax - works contract services - Commercial or Industrial construction service - appellant worked as sub-contractor and the principal contractor has paid the Service tax on such work - time limitation - suppression of facts or not - HELD THAT:- There are force in argument of Ld. Counsel that since the works performed by the appellant was along with material the demand of service tax should have been raised under the taxable category of works contract services. The demand of service under the head of Commercial or Industrial construction service is not sustainable. It is noted that the appellant’s activity of construction also involved supply of goods/ material. The Appellate Tribunal in the matter of M/S. ASWINI APARTMENTS VERSUS COMMISSIONER OF GST & CENTRAL EXCISE CHENNAI SOUTH [2018 (10) TMI 404 - CESTAT CHENNAI] had held that the composite contact involving supply of materials and rendition of services not taxable either prior to 1-6-2007 or w.e.f. 1-6-2007 under Commercial or Industrial Construction service. However, such composite contracts are taxable only w.e.f. 1-6-2007 under Works Contract service. Prior to 1-6-2007 or w.e.f. 1-6-2007, only those contracts which are purely for services, are taxable under Commercial or Industrial Construction service - the demand of service tax under commercial or industrial construction service in the present matter also not sustainable. Extended period of limitation - HELD THAT:- There were contrary judgments on the issue that whether the sub-contractor is liable to service. Subsequently the matter was referred to Larger Bench. On the disputed issue, it is not only the larger bench decision which settled the law but there were contrary circular of the Board on the issue of payment of service tax by the sub-contractor. In view of this position, there is no suppression of facts or any mala fide intention to evade payment of service tax on the part of appellant. Further, the ground of bona fide belief can be invoked in the present case as the main contractor who entered into agreement with the ultimate client were charging such client along with service tax as claimed by the appellant. There is a reason for a bona fide belief in such arrangement regarding non-liability of sub-contractor when the main contractor is liable to discharge full service tax. Though the said principle is not applicable against the tax liability but the question of invoking extended period is to be answered in favour of the appellant - there is no case of fraud, misstatement etc. in the non-payment of tax on this activity by the appellant and, we hold that extended period of limitation is not attracted. Appeal allowed.
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