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TMI Blog2024 (10) TMI 1345X X X X Extracts X X X X X X X X Extracts X X X X ..... uitment or Supply Agency Service'. The Appellant has entered into an agreement on 30.06.2004 with M/s. Prism Logistics Private Limited, 33A, Jawaharlal Nehru Road, 4th Floor, Suite No. 11, Kolkata - 700 071, for supply of labour for undertaking and supervising different jobs in the in-plant logistics of M/s. South Asian Petrochem Limited, Haldia. The above said activity of supply of labour falls within the taxable service category of 'manpower recruitment or supply agency service' as defined under Section 65(105)(k) of the Finance Act, 1994. 2. On verification of the certificates of Tax Deducted at Source (TDS) received from the Income Tax Department, it was found that the Appellant had not paid appropriate Service Tax on the amount realiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntractors were also required to pay Service Tax when the main contractor has paid Service Tax on the entire value as the sub-contractor would be eligible to take CENVAT Credit. Even after issue of this Circular, they were under the bona fide belief that the sub-contractors are not liable to pay service tax, as the entire issue is revenue neutral. 4.2. The Appellant submits that they have not suppressed any information from the Department; the Show Cause Notice has been issued on the basis of scrutiny of the returns filed; the bills, balance-sheet and contracts with the main contractor were also scrutinized; no objections were raised by the Department during the course of such scrutiny. The Appellant has also submitted evidences to the exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy service' as defined under Section 65(105)(k) of the Finance Act, 1994. 7.1. We find that the Appellant has not disputed the liability to Service Tax on the said services rendered by them to the main contractor viz. M/s. Prism Logistics Pvt. Ltd. The Appellant is primarily contesting the demand on the ground of limitation stating that they have not suppressed any information from the Department and that the Department has raised the demands based on the documents submitted by them. Accordingly, they have contended that the demands raised by invoking the extended period of limitation are unsustainable. 7.2. We observe that the Circular No.96/7/2007-S.T. dated 23.08.2007 has been issued clarifying that sub-contractors are required to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en raised. Therefore, we hold that suppression of facts with intention to evade the tax has not been established in this case. For the same reason, the penalty under Section 78 of the Finance Act, 1994 is not imposable on the Appellant. 8. In view of the above, we hold that the demand of Service Tax by invoking the extended period of limitation is not sustainable. Accordingly, we set aside the impugned order and remand the matter back to the adjudicating authority for the purpose of calculating the Service Tax liability for the normal period of limitation, if any. The Appellant is liable to pay service tax along with interest for the normal period of limitation. 9. In view of the above, we pass the following order: - (i) The demand rais ..... X X X X Extracts X X X X X X X X Extracts X X X X
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