Custom, Excise & Service Tax Tribunal
Yes vs Represented By : Adj. Request on 7 October, 2013
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad Appeal No. : ST/11897/2013 Arising out of : OIO No. STC/08/COMMR/AHD/2013 dated 30.03.2013 Passed by : Commissioner of Central Excise & S.T., Ahmedabad For approval and signature : Mr. M.V. Ravindran, Hon'ble Member (Judicial) Mr. H.K. Thakur, Honble Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Appellant (s) : M/s. Mahalaxmi Infracontract Limited Represented by : Adj. request Respondent (s) : Commissioner of Central Excise & S.T., Ahmedabad
Represented by : Sh. K. Sivakumar, A. R. CORAM :
Mr. M.V. Ravindran, Hon'ble Member (Judicial) Mr. H.K. Thakur, Honble Member (Technical) Date of Hearing / Decision : 07.10.2013 ORDER No. _____________ /WZB/AHD/2013 Dated 07.10.2013 Per : Mr. H. K. Thakur;
This stay application and appeal has been filed by the appellant against OIO No. STC/08/COMMR/AHD/2013 dated 05.03.2013. Appellant is working as a sub-Contractor of M/s. Ranjit Construction Limited (presently known as M/s. Ranjit Buildcon Limited and M/s. Sadbhav Engineering Limited)
2. Sh. P. M. Dave (Advocate) appearing on behalf of the appellant submit that the main contractor M/s. Ranjit Construction Limited has already paid the Service Tax on the entire contract value. It is his submission that only a part of the total contract, on which Service Tax is already paid by the main contractor, is further contracted to the appellant. He argued that no Service Tax was payable by the appellant as sub-Contractor up to 23.08.2007 as per CBEC Circular No. 96/7/2007-ST dated 23.08.2007 reproduced in Para 7.3 of the OIO. It was his case that charging Service Tax on the entire contract value which has already been paid by the main contractor, will amount to double taxation. He relied up to the following case laws:-
(a) National Building Construction Corpn. Limited vs. C.C.E. & S.T., Patna [2011 (23) S.T.R. 593 (Tri. Kolkata)]
(b) Viral Builders vs. C.C.E., Surat [2011 (21) S.T.R. 457 (Tri. Ahmd.)]
(c) Vijay Sharma & Company vs. C.C.E., Chandigarh [2010 (20) S.T.R. 309 (Tri. LB)]
3. Sh. K. Sivakumar (A.R.) appearing on behalf of the Revenue argued that there is no question of double taxation as the service provided by the present appellant is a different service then the service provided by the main contractor M/s. Ranjit Construction Limited to his clients. It was his case that nothing stops the appellant to pay Service Tax which can be taken as Cenvat credit by the main contractor which discharging his Service Tax liability.
4. Heard both sides & perused the case records. The facts of the present case are similar to the facts in the case of National Building Construction Corpn. Limited vs. CCE & ST, Patna (supra) relied upon by the appellant, where the sub-Contractor was having a contract with NBCC who in turn was the main contractor and providing services to M/s. NTPC. M/s. NBCC (main contractor) had paid the Service Tax of the entire contract value between M/s. NBCC and M/s. NTPC. It was held in Para-9 of this judgment that sub-Contractor has not rendered direct Service to M/s. NTPC and if any tax was paid by the Sub-Contractor the same was available as credit to NBCC and that was held to be a case of revenue neutrally and that no tax is demandable from the Sub-Contractor.
4.1 Simple a view was taken by the Larger Bench in the case of Vijay Sharma & Co. vs. CCE, Chandigarh (supra) that if the main broker is asked to pay Service Tax then a set off to the extent of duty paid by the Sub-broker is required to be given. The matter was accordingly recommended to the lower authorities. On the basis of the same ratio if the main contractor has paid Service Tax of the entire contract value, including the value for which contract was given to the present appellant then no Service Tax is required to be paid by the appellant due to revenue neutrality.
5. In view of the above observations, after allowing the stay application, the appeal itself is taken up for disposal. Based on the ratio laid down in the cases relied upon by the appellant the matter is remanded to the adjudicating authorities to verify whether the main contractor has paid the Service Tax of the entire contract value which also include the value for which contract was given to the sub-Contractor. If found so, no Service Tax liability will be attracted from the present appellant due to revenue neutrality. Needless to state that adjudicating authority will give an opportunity to the appellant to explain the case and will decide the matter by following principles of natural justice. It is made clear that all issues are kept open for the adjudicating authority to deliberate upon.
Appeal is allowed by way of remand.
(Operative portion of the order pronounced in the Court)
(M.V. Ravindran) (H.K. Thakur)
Member (Judicial) Member (Technical)
KL....
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