Case Law Details
Pramukh Earth Movers Vs C.C.E. & S.T.-Vapi (CESTAT Ahmedabad)
CESTAT Ahmedabad held that it is settled legal position that sub-contractor is liable to pay service tax even though main contractor has paid service tax on total value. Accordingly, service tax demand sustained.
Facts- The appellant was engaged in providing services of “Supply of Tangible Goods, Site Formation/Leveling of Land and Construction Service in the capacity of Sub-contractor. The main contractors obtained the contracts out of which only partial of work was assigned to the appellant in respect of which appellant provided the aforesaid services. The appellant under the belief that main contract is discharging the service tax liability on the contracts awarded to them, they are not liable to pay Service Tax on the works/Services rendered by him. Therefore the appellant did not take service tax registration and also not paid the service Tax on the aforesaid service provided by him in the capacity of Sub-contractor.
Therefore, a show cause notice dated 07.06.2012 was issued to the appellant covering the period 13.11.2007 to 31.03.2011 by invoking the extended period of 5 years as per the first Proviso to Subsection(1) of Section 73 of Finance Act, 1994 for demanding Service Tax amounting to Rs 86,57,392/- by the Order-in-Original dated 03.09.2013. The commissioner confirmed the demand.
Conclusion- Held that in case of service provided by sub-contractor even though the main contractor have paid the service tax on total value the sub-contractor is liable to pay service tax. The bonafide belief of the appellant that they are not liability to pay service tax cannot be doubted, questioned. In such situation the extended period which can be invoked only on the ingredient such as suppuration of fact, misstatement, fraud, collusion with intent to evade payment of Service Tax, cannot be invoked.
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