Digvijay Singh Rathore Vs Commissioner of Central Excise & CGST (CESTAT Delhi)
CESTAT Delhi: Extended period not invocable where conflicting decisions existed on service tax liability of sub-contractor
Summary: The appellant, a sub-contractor, faced a service tax demand for the period April 2015 to June 2017 on the issue whether service tax was payable by the sub-contractor where the main contractor had already discharged service tax on the services rendered by the sub-contractor. The show cause notice was issued on 07.10.2020, beyond the normal period of limitation. Before the Tribunal, both sides submitted that the issue of service tax liability of a sub-contractor in such circumstances had been referred to the Larger Bench in Commissioner of Service Tax Vs M/s Melange Developers Private Limited, reported as 2019 (6) TMI 518 – CESTAT New Delhi, and that the Larger Bench had held that even where the main contractor had paid service tax, the sub-contractor was also liable to pay service tax, with the service tax paid by the sub-contractor available as Cenvat credit to the main contractor. The appellant, however, contended that conflicting views had existed during the relevant period and that the reference to the Larger Bench itself demonstrated that the issue was not free from doubt. The Tribunal accepted this submission for the purpose of limitation. It held that, given the conflicting views on the issue during the relevant period, the extended period of limitation could not be invoked. Since the dispute covered April 2015 to June 2017 and the show cause notice was issued on 07.10.2020 beyond the normal limitation period, the appeal was allowed only on the ground of limitation. The impugned order was set aside with consequential relief to the appellant.
