Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2024 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (3) TMI 71 - AT - Service TaxLevy of service tax - Dredging Services undertaken by the Appellant as a sub-contractor of M/s MBL - Construction Service - Goods Transport Agency Service - time limitation - penalties. Levy of service tax - 'Dredging Services' as a sub-contractor to the main contractor - contention of the Appellant is that as the main contractor M/s. MBL has discharged service tax on the gross amount received by them towards the whole amount received rendering of 'Dredging Services', they are not liable to pay service tax again for the 'Dredging Service' as a sub-contractor - HELD THAT:- The Department had also earlier clarified that the sub-contractor is not liable to pay service tax when the main contractor pays service tax on the gross value received for the services rendered. Thus, we observe that there were confusions regarding the liability for payment of service tax by the sub-contractor, when the main contractor pays service tax on the gross value. Later, the Board issued a further clarification vide Circular No. 96/7/2007-ST dated 23.08.2007, clarifying that sub-contractors are liable to pay service tax even if the main contractor pays service tax on the gross value. This Circular, being oppressive in nature towards the sub-contractors, can be applied only prospectively as held by the Hon’ble Supreme Court in the case of SUCHITRA COMPONENTS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, GUNTUR [2007 (1) TMI 4 - SUPREME COURT] - for the demand of Rs.38,16,593/- confirmed under ‘Dredging Services’ rendered by the Appellant as a ‘sub-contractor’ pertaining to the period 2005-06 and 2006-07, it is held that the demand confirmed in the impugned order is not sustainable. Levy of service tax - dredging services undertaken by the Appellant in the river Daya and at the lagoon of Chilka lake, as a sub-contractor - HELD THAT:- The said demand has been raised for the period 2008-09 to 2011-12. It is also observed that all the amounts received by the Appellant for the dredging services rendered have been recorded in their books of accounts, i.e., in the Balance Sheet and Profit & Loss Account. The figures mentioned in the statutory records are not challenged by the Department. The Notice has not brought in any evidence to substantiate the allegation of suppression of any information on the part of the Appellant. Moreover, the 'Dredging Service' rendered by the Appellant was within the knowledge of the Department - the said demand covers the period up to September 2011. The Appellant has been filing ST-3 returns regularly. During the relevant period, the demand, if any, for the normal period of limitation has to be issued within a period of one year from the relevant date, i.e., the date of filing of the return. The Appellant has filed the ST-3 return for the period April 2011 to September 2011 in October 2011. Thus, it is observed that the entire demand in the Show Cause Notice dated 18.10.2013 was raised beyond the normal period of limitation. Accordingly, the demand of service tax of Rs.1,15,68,852/- confirmed on ‘Dredging Services’ in the impugned order by invoking the extended period of limitation is not sustainable. Penalty - HELD THAT:- As there is no evidence on record to establish suppression of facts with intention to evade payment of service tax, the penalty imposed equivalent to the service tax confirmed is not sustainable. Appeal allowed.
|