TMI Blog2018 (6) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... received from the sub-contractor, shall be treated as fresh output service according to that sub-contractor as well as the respondent being main contractor are independently liable for payment of service tax - the matter needs to be remanded to Adjudicating Authority as whether demand can be dropped on the ground of revenue neutrality. Penalty u/s 76 77, and 78 - Held that:- From the plain reading of above section 80 it can be seen that the penalty can be waived under section 80 only in those case where there is sufficient cause for non payment of service tax. The section 80 does not provided wavier of penalty only when Service Tax is paid before issuance of Show Cause Notice therefore for waiver of penalty some more circumstances need ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g payment of Service Tax and the amount shown in the Balance Sheet. 2. After detailed investigation and scrutiny of document a Show Cause Notice dt. 08.10.2010 was issued for a demand of ₹ 5,53,99,919/- interest under section 75 of Finance Act, 1994 was demanded and amount of ₹ 4,36,08,868/- paid by the responded was proposed to be appropriated against the demand made above and penalty under section 76, 77 and 78 was proposed. The said Show Cause Notice was adjudicated by the Ld. Commissioner, Wherein he confirmed the demand of Service Tax ₹ 2,46,210/- and appropriated ₹ 4,36,08,868/- from the payment already made against the above confirmed liability, demand of interest under section 75 of Finance Act, 1994 for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax on such service paid by Sub-contractor. He submits that even though the sub-contractor paid the Service Tax for the services he has provided but the respondent is recipient of service which is an input service for them. As per contractual Agreement the respondent have provided their service to their client which includes a portion of service provided by the sub-contractor who in such case is legally bound to pay Service Tax which provided to the respondent. Even the same service forwarded by raising the bill by the respondent to their client there is fresh provision of service wherein the respondent is a service provider and their client, is a service recipient, the transaction with their client is liable for Service Tax. He relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent is entitled for the Cenvat Credit of such Service Tax and to that extent respondent need not to pay the service tax amount in cash that the entire exercise will be of revenue neutrality, for this reason also demand does not arise. 6. As regard penalty under section 76, 77 and 78 dropped by the Ld. Commissioner, He submits that here it is a case of delayed payment of service tax the respondent has paid entire service tax along with interest before issuance of Show Cause Notice, therefore the Commissioner considering these undisputed fact rightly dropped the penalty which does not require any interference. 7. We have carefully considered the submissions made by both sides and perused the records. As regard the levy of service tax o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otherwise, only after ascertaining these facts, it can be determined that whether there is revenue neutrality. If on verification it is found the total tax liability on portion of service provided by sub-contractor is equal or less then Cenvat Credit on the service tax paid by the sub-contractor then only this can be a case of revenue neutrality. We are therefore of the view that on this particular issue the matter needs to be remanded to Adjudicating Authority as whether demand can be dropped on the ground of revenue neutrality. 8. As regard penalty proposed by the revenue in the ground of appeal under section 76 77, and 78 we find that the learned Commissioner did not impose said penalties mainly on the ground that the appellant had d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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