Custom, Excise & Service Tax Tribunal
Ms Harpal Singh Kalsi vs Allahabad on 16 August, 2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT No. I
Service Tax Appeal No.70535 of 2019-[SM]
(Arising out of Order-in-Appeal No.64/ST/ALLD/2019 dated 31/03/2019
passed by Commissioner of CGST & Central Excise (Appeals), Allahabad)
M/s Harpal Singh Kalsi, .....Appellant
(A-13, Rihand Colony, Pipri, Sonebhadra)
VERSUS
Commissioner of Central Excise, ....Respondent
(Allahabad) APPEARANCE:
Shri Kartikeya Narain, Advocate for the Appellant Shri Santosh Kumar Agarwal, Authorised Representative for the Respondent CORAM: HON'BLE MR. ANIL G. SHAKKARWAR, MEMBER (TECHNICAL) FINAL ORDER NO-71550 / 2019 DATE OF HEARING : 16 August, 2019 DATE OF DECISION : 16 August, 2019 PER: ANIL G. SHAKKARWAR After hearing both the sides duly represented by Shri Kartikeya Narain learned Advocate appearing on behalf of the appellant and Shri Anupam Kumar Tiwari learned Authorised Representative appearing on behalf of Revenue, I note that the appellant was sub-contractor for one main contractor M/s BSBK Pvt. Ltd., Nandini Road, Bhilai, Chhatisgarh. M/s BSBK was
2 Service Tax Appeal No.70535 of 2019 providing services in respect of projects and had received input services from the appellant. During the audit of the accounts of M/s BSBK, revenue came to know that appellant had provided services to M/s BSBK and did not pay service tax on the services provided by them. Therefore, proceedings were initiated for recovery of service tax amounting to around Rs.5 lakhs from the appellant, which culminated into filing of present appeal.
2. Learned Counsel for the appellant has submitted that before issue of show cause notice revenue had checked up with M/s BSBK and M/s BSBK had informed that appellant had neither charged service tax from M/s BSBK nor deposited the same and that M/s BSBK deposited the entire service tax on the entire work done by them which included the services rendered by the appellant. Learned Counsel for the appellant has submitted that when it is a fact that main contractor has paid service tax on entire quantum of service including services rendered by sub- contractor then again collection of tax from sub-contractor will be double taxation.
3. On the contrary learned A.R. appearing for revenue has submitted that as per Circular dated 23.08.2007 issued by CBEC the sub-contractor has to pay service tax and also submitted that Commissioner (Appeals) has held that main contractor was eligible for exemption under Notification No.1/2006 dated 01.03.2006 and therefore, sub-contractor should pay the service tax.
3 Service Tax Appeal No.70535 of 2019
4. At this stage, learned Counsel for appellant submits that whether the main contractor is eligible for such notification or not was not subject matter in the present proceedings and Commissioner (Appeals) has brought the said issue on his own when it was not argued by the either parties. He submits that Commissioner (Appeals) has not made any factual verification as to whether the said notification was availed by M/s BSBK or not and therefore, without factual verification it is only presumption by the learned Commissioner (Appeals). Further, the learned Counsel for the appellant has relied on the decision of this Tribunal in the case of M/s Sai Consulting Engineers Pvt. Ltd. Vs Commissioner of Central Excise & Service Tax, Ahmedabad reported at 2018 (9) GSTL 102 (Tri.-Ahmd.) wherein it has been held that when the principal contractor discharges service tax liability on total contract awarded to him, sub-contractor need not pay service tax.
5. Having considered the rival submissions made by both the sides and on perusal of record, I note that the issue is no more res-integra and stands decided by the decision of this Tribunal in the said case of M/s Sai Consulting Engineers Pvt. Ltd. For sake of ready reference, I reproduce para no.3, 4 & 5 of said order bellow:-
"3.The appellant herein is a sub-contractor of M/s. Louis Berger Group INC. From the record, it transpires that the said M/s. Louis Berger was awarded a contract for civil work of Mumbai Urban Transport Project Road Network. Out of the total contract, the appellant herein was given part of the work of consulting for which an amount was paid as consideration. The appellant during the relevant 4 Service Tax Appeal No.70535 of 2019 period did not discharge the Service Tax liability when the demand was raised . He produced the certificate issued by the CA of M/s. Louis Berger who has stated that Louis Berger has discharged the Service Tax liability on the total contract which was awarded to them. Producing the said certificate the appellant claimed before the lower authorities that they are not required to discharge any Service Tax liability. Both the lower authorities have held that Board's Circular dated 23-8-2007 would apply as the appellant being a sub-contractor is required to discharge the Service Tax liability.
4.In my considered view, the lower authorities herein have mis-construed the law on the point. First of all, it is undisputed that M/s. Louis Berger has discharged the applicable Service Tax liability on the amount of contract awarded to them; part of the consultancy service as required for such tender was awarded to them and that the appellants record that Louis Berger clearly indicate that they have discharged the Service Tax liability. On the face of such factual position, the Division Bench ordered in the case of Mahalaxmi Infracontract Ltd. Vide Order No. A/11314/2013/WZB-AHD/2013, dated 7-10-2013 will be applicable on all fours. The ratio of the decision is in paragraph No. 5 whereunder the Division Bench has categorically stated that if the main contractor has paid the Service Tax on the entire contract value which also include the value of the contract as given to sub-contractor, there is no necessity to pay the Service Tax by the sub- contractor. The said ratio will be applicable in the case in hand on all force.
5.In view of the foregoing and in the facts and circumstances of the case, I hold that the impugned order is unsustainable and liable to be set aside and I do so. The impugned order is set aside and the appeal is allowed.
6. On perusal of the decision of this Tribunal in the above stated case and on perusal of the facts as submitted by both the representatives, I note that the decision of this Tribunal in the case of M/s Sai Consulting Engineers Pvt. Ltd. (supra) is squarely applicable in the present case. Therefore, I set aside the 5 Service Tax Appeal No.70535 of 2019 impugned order and allow the appeal. The appellant shall be entitled for consequential relief as per law.
(Dictated and pronounced in open court) (Anil G. Shakkarwar) Member (Technical) akp