TMI Blog2023 (7) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... en if the main contractor has discharged the liability. The issue no merits is found against the assessee and in favour of the Department. Extended period of limitation - HELD THAT:- The issue whether in such cases extended period of limitation can be invoked or not was also considered by various benches of Tribunal and in this regard the Delhi Tribunal in the case of M/S MAX LOGISTICS LIMITED VERSUS CCE, JAIPUR [ 2016 (9) TMI 1024 - CESTAT NEW DELHI] where it was held that The service. tax liability is as such on the arrangement based on agreement which is also the basis for payment of full service tax by RSIC. In other words, the service tax liability of both RSIC and the appellant has common source agreement. As such, we find the demand for extended period is not sustainable in the present case. The appellant being sub-contractor is liable to pay service tax on Erection, Commissioning and Installation service. But, extended period cannot be invoked to demand service tax from the appellant. In the present case, the period of dispute is from October, 2004 to March 2009 and as per the appellant the demand for the period April, 2004 to September 2008 amounting to Rs. 6019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proprietor of the appellant appeared before the Department and submitted the copies of TDS certificates pertaining to the financial year 2005-2006 to 2007-08 and also made his statement. The department issued the show cause notice alleging the non payment of service tax on the taxable service of Erection, Commissioning and Installation provided by the appellant. Appellant filed detailed reply to the show cause notice taking the defence that the appellant is not the direct or the main contractor but a sub-contractor and hence the service tax is not payable by the appellant being a sub-contractor of the work when its main contractor has paid the service tax on the entire work. The appellant has also taken other defences and after following the due process, the commissioner has passed the impugned order in which he has rejected the appellant s submissions in reply to the show cause notice, and only accepted to the extent that the amount allegedly received by it should be considered as inclusive of tax and also benefit of Cenvat credit of the tax paid on input services should be allowed to the appellant. Aggrieved by the said order, the appellant has filed the present appeal. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice tax even when the main contractor has paid the service tax on the whole amount. He cited the following decisions which have been decided after the CBEC s master circular dated 23.08.2007 wherein it was held that when the main contractor has paid the service tax itself, sub-contractor was not required to deposit the service tax. Visesh Engineering Co. Vs. Commissioner of Customs, Ex. S.T., Guntur, 2016 (43) S.T.R. 232 (Tri.-Hyd.) Thadi Satya Ramalinga Reddy Vs. CCE, S.T. Cus. 2017 (4) GSTL 421 (Tri.-Hyd.) Power Mech Project Ltd. Vs. Commissioner of Customs, Guntur, 2017 (48) STR 165 (Tri.-Hyd.). 7. He further submitted that even though the decisions cited (Supra) were overruled by the Larger Bench of the CESTAT subsequently in the CST Vs. Melange Developers P. Ltd., 2020 (33) GSTL 116 (LB). He further submitted even that after the decision of the Larger Bench in the case of Melange Developers P. Ltd cited (Supra) the appellant is not liable to pay the service tax on the extended period of limitation. He also relied upon the decision in the case of Max Logistics Ltd. Vs. Commissioner of Central Excise, Jaipur, 2017 (47) S.T.R. 41 (Tri.-Del.) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r would then be eligible to take credit of such Service Tax paid by the appellant as these are input services for the main contractor. This issue is no longer res integra and is settled by the decision of the Larger Bench of the Tribunal in the case of Commr. of S.T., New Delhi v. M/s. Melange Developers Pvt. Ltd. reported in 2020 (33) G.S.T.L. 116 (Tri. CB). It was observed as under: 15. It is not in dispute that a sub-contractor renders a taxable service to a main contractor. Section 68 of the Act provides that every person, which would include a sub-contractor, providing taxable service to any person shall pay Service Tax at the rate specified. Therefore, in the absence of any exemption granted, a sub-contractor has to discharge the tax liability. The service recipient .e. the main contractor can, however, avail the benefit of the provisions of the Cenvat Rules. When such a mechanism has been provided under the Act and the Rules framed thereunder, there is no reason as to why a sub-contractor should not pay Service Tax merely because the main contractor has discharged the tax liability. As noticed above, there can be no possibility of double taxation because the Cenvat Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts [importers and exports] were subjected to service tax which was deposited to the Government. RSIC in turn are paying certain amount to the appellants to get the services in these ICDs. In such situation, there is a clear possibility for a bona fide belief that as the whole amount has been subjected to service tax the amount received by the appellant may not be liable to service tax in connection with the services rendered by them. The issue involved has been a subject matter of interpretation by the Tribunal and High Courts. In fact the earlier Circular issued by the Board, covering the period prior to the introduction of Cenvat Credit Rules gave an impression that when the main service provider discharged the service tax on gross value there may not be tax liability on the sub-contractor rendering similar service to the main contractor The Tribunal in various cases held in such a case involving interpretation of law and also a bona fide belief regarding service tax liability, will not attract the demand for extended period. We also take note that service tax liability on the appellant when discharged will be available as a credit to RSIC which can be used by RSIC for discha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gument of Ld, Counsel. We find that during the relevant period there were various Circulars and trade notices by the Commissionerate clarifying that where the principle service provider discharged his service tax liability on the entire value of the services, a separate liability cannot be imposed against the sub-contractor. The said Circulars stands taken note of by the Tribunal in various judgments and its stand held that where the entire service tax has been paid on the full consideration of the services, the sub-contractors' liability would not arise to pay service tax again on the part of principle service. One such reference can be made by following circulars: TRU letter F. No. 341/18/2004-TRU (Pt.) dated 17-12-2004 - Circular No. 23/3/97-5.T., dated 13-10-1997 - Master Circular No. 96/7/2007-ST dated 23-8-2007 In fact, also from various following decisions of the Tribunal:- - Urvi Construction v. CST, Ahmedabad 2010 (17) S.T.R. 302 (Tri. Ahmd.) = 2009- TIOL-1890-CESTAT-AHM -CCE, Indore v. Shivhare Roadlines - 2009 (16) S.T.R. 335 (Tri.-Del.) =2009-TIOL-526-CESTAT-DEL - Harshal Company v. CCE, Vadodara - 2008 (12) S.T.R. 574 (Tri.- Ahmd.) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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