Essem Erectors Vs Commissioner of Central Excise (CESTAT Mumbai)
The appellant is a contractor undertaking erection, installation and commissioning work. M/s BHEL had awarded a work for installation of thermal power plant to M/s Sunil Hi-Tech (main contractor). The main contractor had, in turn, awarded the work to the appellant (sub-contractor). The main contractor had paid service tax on the entire value of the contract. However, demand was raised on the appellant that it was also liable to pay service tax under “erection, installation or commissioning” service. The extended period of limitation was invoked. Hence, appeal.
Hon’ble CESTAT, Mumbai set aside the demand and allowed the appeal. It held: (i) the issue whether sub-contractor is liable to pay service tax, even when main contractor has paid is decided by Larger Bench of the CESTAT in Melange Developers case; (ii) however, there were conflicting decisions on the said issue; hence; extended period of limitation is not invokable; (iii) issuance of demand under normal period of section 73 is the rule and invocation of extended period is an exception; hence; the Revenue needs to prove that the ingredients for invocation of larger period are present; (iv) issue not being free from doubt cannot lead to invocation of extended period.
