Custom, Excise & Service Tax Tribunal
Dns Contractor vs Commissioner Of Central Excise on 10 February, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Service Tax Appeal No . 60572, 60590, 60591, 60592, 60593, 60594, 60595, 60596 and 60597 of 2013-SM
Service Tax Stay Application No. 61697, 61713, 61714, 61715, 61716, 61717, 61718, 61719 and 61720 of 2013
[Arising out of Order-In-Appeal No. 200-208/STax/D-II/2013 dated 5.9.2013 passed by Commissioner of Central Excise (Appeals), Delhi I ]
For approval and signature:
Honble Ms. Archana Wadhwa, Member (Judicial)
1
Whether Press Reporters 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 the 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
DNS Contractor Appellants
A D Construction
Pawan Kumar Yogi
Buildup Interior
R S Contractors
Ravi Singh Contractor
O P Interiors
S P Sharma and Co.
Raj Brothers
Vs.
Commissioner of Central Excise Respondent,
Delhi I Appearance:
Shri J K Monga, Advocate for the Appellants Shri Devender Singh, Jt.CDR for the Respondent Date of Hearing /Decision: 10.2.2014 ORDER NO . FO/ 50701-50709 /2014-SM(Br) Per Ms. Archana Wadhwa:
After dispensing with the condition of pre-deposit of dues in all the matters, I proceed to decide the appeals itself inasmuch as the appellants contention about the payment of service tax by the main constructor requires factual verification.
2. The appellants are sub-contractors of one M/s. SCG Contracts Pvt. Ltd., service tax registered unit engaged in providing taxable services in the category of industrial or commercial construction. A part of the services stand given by the main contractor to the present appellants. The proceedings were initiated against the sub-contractor for payment of service tax in respect of services provided by them to the main contractor. One of the pleas taken by the appellants is that main contractor has deposited the entire amount of service tax on the full construction value. As such, confirmation of demand of service tax against the present appellants would amount to double payment of tax on the same value. For the above purpose, the appellants have relied upon the Tribunals decision in the case of JAC Air Services Pvt. Ltd. vs CST, Delhi reported as [2013 (31) STR 155 (Tri-del)] and Viral Builders vs. CCE, Surat reported as [2011 (21) STR 457 (Tri-Ahmd)].
3. The lower authorities have not followed the above fact of payment of service tax by the main contractor but has held that in accordance with the Cenvat credit Rules, the person who provides services have to be taxed and the main contractor is within his right to avail Cenvat credit. It is further seen that though the Tribunals decision in the case of JAC Air services Pvt. Ltd. was produced before the Commissioner (Appeals), he has not followed the same by observing that the Tribunals pronouncement of the said decision is relying on CBEC circular dated 7.10.98 which was issued in pre-Cenvat credit Rule 2004 era and has not examined the matter in the light of CBEC circulars dated 23.8.07.
4. Without going into the detailed arguments, I find that as per various pronouncements of the Tribunal, if the service tax liability stand discharged on the full and complete value, the sub-contractor cannot be taxed again in respect of same services, on that part value in the services provided by them. Admittedly it would amount to double taxation in respect of same services, Tribunal in the case of M/s. Anand Sales Corpn and others vs CCE Kanpur Final Order No. 50337-50344 /2014 dated 29.1.2014 has done a detailed discussion in the manner and has held that inasmuch as during the relevant period, the practice of payment of service tax on the full value was the general practice being adopted, the separate confirmation of service tax against the sub-contractor would not be justified, though the Cenvat credit Rules, as rightly argued by learned Jt. CDR requires separate payment of service tax on separate activities, which service tax would be available as credit to the main contractor. Learned Jt.CDR relies on the Tribunals decision in the case of Safe and Sure Marine Services Pvt. Ltd. vs. CST, Mumbai reported as [2012 (28) STR 30(Tri-Mum)] laying down that it is the responsibility of the sub contractor to pay service tax. But keeping in view the other decisions referred supra, and keeping in view that when the principle contractor has paid the service tax on the entire value, and keeping in view that exchequer cannot be enriched on account of double taxation and keeping in view that the Revenue has already earned its share of service tax whether coming from the pocket of main contractor or from the pocket of sub contractor and keeping in view the earlier Boards clarifications which were relevant during the period which stand relied upon the case of JAC Air services and keeping in view that concept of service tax are still not clear and keeping in view that there was a pattern in the industry for payment of service tax by the main contractor and keeping in view that entire situation is revenue neutral, I deem it fit to set aside the impugned order and allow all the appeals with consequential relief.
5. At this stage, I would like to deal with the learned Jt. CDRs proposal that by setting aside the impugned order, the Tribunal has taken the powers of legislation, I do not agree with the same inasmuch as no provisions of Rule stand introduced by the Tribunal in the Cenvat credit Rules. It is based upon the interpretation of entire provisions of Cenvat credit Rules as also the equity in tax as also on the issue of Revenue neutral, I set aside the impugned order do demand of duty and imposition of penalty.
6. However, I find that though the appellant has taken this plea before the lower authorities, there is no verification of the fact that the main contractor has discharged the entire duty liabilities. As such, for verifying the said factual position, I set aside the impugned order and remand the matter to the original adjudicating authority.
7. Stay petitions and appeals are disposed of in the above manner.
(Dictated & pronounced in the open Court )
( Archana Wadhwa ) Member(Judicial)
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