Molax Powder Coating Vs Commissioner of Central Excise and Service Tax (CESTAT Chennai)
Service Tax liability of sub-contractor not cease, even when main contractor remits Service Tax
The appellant has urged that they were providing the job work of powder coating on goods received from M/s. KFPL, who are the manufacturers of cabinets for M/s. BPL Telecom Pvt. Ltd., the main manufacturer. The facts borne on record reveal that the said M/s. KFPL appears to have admitted that the powder coating was done by the appellant herein, for which they were availing CENVAT Credit but without filing any declaration with the jurisdictional Officer, however, the powder coating charges were also collected from M/s. BPL Telecom Pvt. Ltd. by the said M/s. KFPL, who are the main service provider. Hence, it was contended that the Service Tax liability was on the main contractor / main service provider i.e., M/s. KFPL, who appears to have remitted the Service Tax, and not on the appellant, who had only discharged the service in the capacity of a sub-contractor.
Learned Larger Bench of the CESTAT in the case of Commissioner of Service Tax, New Delhi v. M/s. Melange Developers Pvt. Ltd. [2020 (33) G.S.T.L. 116 (Tri. – LB)] has held that the Service Tax liability of a sub-contractor would never cease, even when the main contractor remits Service Tax. Thus, the contention of the appellant that there was no Service Tax liability on the part of the appellant, being a sub-contractor, would not hold any water in view of the decision of the Learned Larger Bench (supra).
