Customs, Excise and Gold Tribunal - Bangalore
Semac Pvt. Ltd. vs The Commissioner Of Service Tax on 14 August, 2006
Equivalent citations: [2007]6STT479
ORDER S.L. Peeran, Member (J)
1. This appeal arises from the Order-in-Appeal No. 172/2003 dated 28.10.2003 holding that the assessee is required to pay service tax for the service provided under the category of "Consulting Engineer". However, the Commissioner (Appeals) has accepted that the appellant is a sub-consultant of M/s Chandravarkar and Thackar (P) Ltd.
2. We have perused the records and the Memorandum of Understanding for consultancy service agreement and noticed that the appellant is a sub-consultant of M/s Chandravarkar and Thackar (P) Ltd. The only issue to be decided in this case is whether the sub-consultant is required to pay the service tax. The contention raised by the appellants is that in terms of the Board's clarification letter No. 11/3/98-TRU dated 7.10.98, when a main consultant has discharged the service tax, the sub-consultant is not required to discharge the same. However, this plea has been rejected by the Commissioner (Appeals) despite clear clarifications issued by the New Delhi Commissionerate by Trade Notice No. 53-CE/ST/97 dated 4.7.1997 and Mumbai Commissionerate-l by Trade Notice No. 7/97-ST dated 4.7.1997. The Board's Circular and the Trade Notices are binding to the Departmental authorities as held by the Apex Court in the case of Fenner India Ltd. v. CCE and in the case of Poulose & Mathen v. CCE . The learned Counsel pointed out to the tabulated details showing fees along with service tax paid by M/s Chandavarkar & Thacker Architects Pvt. Ltd. and submits that these details had been furnished to the Original authority but he has incorrectly noted that they have not produced the same. He submits that if the said details were considered then there is no service tax liability at all in the present case. He also submits that penalty is not leviable as Finance Act clearly laid down that prior permission of the Commissioner has to be taken for levy of penalty under Section 78 of the Act. It is the submission that as service tax liability does not arise, therefore the question of levy of penalty also does not attract.
2. The learned Jt. CDR submits that the appellants have now produced the tabulated details showing fees along with service tax paid by the main consultant and these details are required to be verified. Therefore the matter may be remanded to the original authority for de novo consideration.
3. On a careful consideration of the matter, we notice that there is no dispute about the appellants being a sub-consultant of M/s Chandravarkar & Thackar (P) Ltd. The Commissioner (Appeals) has not followed the Board's Circular and Trade Notices which clearly laid down that the sub-contractor/sub-consultant is not required to discharge service tax as the main consultant discharged the same. The appellants have placed evidence but the original authority has noted that the same has not been produced. In view of this position, we are of the considered opinion that the matter is required to be remanded for de novo consideration on limited issues. The appellants shall be given an opportunity to establish that the main consultant has already discharged the service tax. The matter shall be re-adjudicated within a period of four months from receipt of this order by following principles of 'Natural Justice'.
(Pronounced and dictated in the open court)