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2018 (2) TMI 84

contractor, M/s DARCL, for payment of service tax by them - Held that: - once the main contractor is paying service tax, the sub-contractor, whose entire value of service is sub-sumed in the value on which the Service Tax is paid by the main contractor, is not required to pay service tax separately - the service rendered is covered by the definition of ‘Cargo Handling Services’ and consequently, the liability for payment of Service Tax has arisen on the part of the appellant - The services provided by the sub-contract and used by the main service provider is liable for payment of Service Tax in the hands of sub-contractor. - Extended period of limitation - Held that: - the department is not justified in invoking the extended time limit .....

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SCN dated 18.10.2012, Service Tax amounting to ₹ 3,52,59,280/- was demanded along with interest and penalty. The same was confirmed by the impugned order and an amount of ₹ 2,79,44,410/- already paid by the appellant during the course of investigation was appropriated. Aggrieved by the impugned order, the present appeal has been filed 2. With the above background, we heard Shri Abhas Mishra, ld Advocate for the appellant as well as Shri Sanjay Jain, DR for Revenue. 3. Shri Abhas Mishra, ld Counsel argued that during the period under dispute, the appellant has provided services to M/s DARCL as a sub-contractor and did not discharge the Service Tax, since M/s DARCL had promised to discharge the entire Service Tax liability on the .....

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te about the fact that appellant is a service provider and has provided Cargo Handling Services to M/s Vedanta Aluminum Limited as a sub-contractor of M/s Delhi Assam Roadlines Corporation Limited (DARCL), who was the main contractor. But the appellant did not discharge the Service Tax on the consideration received by them on the ground that the entire value is already included by the main contractor, M/s DARCL, for payment of service tax by them. In this connection, they have referred to the clarification issued by DGST in October, 2003 to the fact that once the main contractor is paying service tax, the sub-contractor, whose entire value of service is sub-sumed in the value on which the Service Tax is paid by the main contractor, is not r .....

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btained from CBEC site. 03) Challan From the above it s clear that on this service, the liability of service tax will cast upon DARC and not upon us. 6. After going through the nature of the activity provided by the appellant, we are of the view that the service rendered is covered by the definition of Cargo Handling Services and consequently, the liability for payment of Service Tax has arisen on the part of the appellant. In this connection, the CBEC circular No.96/7/2007-ST dated 23.08.2007 has clarified the issue as follows: Reference code Issue Clarification 999.03/23.08.2007 A taxable service provider outsources a part of the work by engaging another service provided, generally known as sub-contractor. Service tax is paid by the servi .....

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ervice Tax. Further, they have also referred to a clarification issued by DGST in October, 2003, to this effect. In the light of the above, we are of the view that the department is not justified in invoking the extended time limit to demand service tax from the appellant. Moreover, the entire details of amount has already been recorded in the books of account of the appellant and the same has been noticed only during the period of audit by the department. 7. In view of above discussions, we restrict the demand of Service Tax to that falling within the normal time limit. For quantifying the demand, as above, the matter is remanded to the adjudicating authority. He will also finalise the issue of penalty. In the result, appeals partially all .....

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