TMI Blog2018 (12) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... on. The argument that if service recipient is paying tax, such service provider would be exempt from payment of tax would destroy the entire structure of all the service tax law. Thus, the argument that no liability can be fixed for appellant because M/s Furnace Fabrica (India) Ltd has paid service tax it cannot be accepted. - demand upheld. Wroks contract service or not - the argument of the appellant is that the services provided by the appellant are in the nature of work contract, therefore, they cannot be any liability of service tax for the period prior to 01.06.2007 - Held that:- From the work order placed to the appellant from M/s Furnace Fabrica (India) Ltd, it is seen that it is essentially work order for service. The questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued that since the main contractor had paid service tax, they were not liable to pay any service tax. In support of his claim that the main contractor has paid service tax, he produced certificate from the main contractor wherein they have stated that they have paid service tax for the service given to Indian Oil Corporation Ltd. Ld. Counsel argued that since main contractor has paid tax any liability of tax on the appellant would amount double taxation. 3. Ld. Counsel argued that period involved in the demand is July, 2003 to Oct, 2006 and nature of service given by them was work contract service. He argued that at the material time no tax paid levied on service in the nature of work contract as held by Hon ble Apex Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaken by M/s Furnace Fabrica (India) Ltd, therefore, no tax liability should be fixed on the appellant being a sub-contractor of M/s Furnace Fabrica (India) Ltd. We find that Finance Act, 1994 places liability on each service provider separately and independently. The Cenvat Credit Rules take credit of payable service part in so much as that service tax paid by person providing service to service recipient is available as cenvat credit to the service recipient. The said cenvat credit can be used to discharge the service liability of the service recipient. In some cases where there is Revenue neutral situation i.e. where the entire service tax paid by the service provider to the service recipient is available as credit to the service recip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sen Toubro (Supra). From the work order placed to the appellant from M/s Furnace Fabrica (India) Ltd, it is seen that it is essentially work order for service. Clause 6.2 of the said contract reads as follows: 6.2 Necessary consumable like; electrodes, gas, grinding wheel, welding holders, etc. as per the requirement and specification. The consumables will be subject to inspection and approval by M/s IOCL/UIL/FFIL. The question is that whether inclusion of the value of consumables in the service would convert all item of service into work contract? Consumption of goods by service provider during the provision of the service does not automatically convert the service into work contract. If the scope of work contract is extended ..... X X X X Extracts X X X X X X X X Extracts X X X X
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