Customs, Excise and Gold Tribunal - Bangalore
Oikos vs The Commissioner Of Central Excise on 6 October, 2006
Equivalent citations: 2007(114)ECC92, 2007ECR92(TRI.-BANGALORE), [2007]8STJ465(CESTAT-BANGALORE), 2007[5]S.T.R.229, [2007]7STT335
ORDER S.L. Peeran, Member (J)
1. This appeal arises from Order-in-Appeal No. 173/2003 dated 28.10.2003 by which the appellants claimed to be treated as 'Architect and Landscape Designers' has been rejected and also their plea that they were only sub-contractors of M/s. Chandravarkar and Thacker (P) Ltd. Bangalore and therefore the Service Tax is not leviable on the sub-contractors.
2. The Commissioner (A) has noted that they had got themselves registered as 'Interior Decorators' for Service Tax purpose and therefore the change in category cannot be done as they claimed as "after thought". He also noted in the impugned order about the fact that appellants are sub-consultants to architect M/s. Chandravarkar and Thacker (P) Ltd.
3. The appellants contested the issue before the Commissioner and pointed out in their application for registration they had never claimed themselves to be 'Interior Decorators' yet the department has considered as 'Interior Decorators' which was contested by them before the Commissioner. Their plea was accepted and they were directed to be registered as Architects. He submits that these facts were apparent on record. The Commissioner's finding that their claim is "after thought" is not correct when the facts were known to the department. He further points out that the fact that appellant being a sub-contractor to the M/s. Chandravarkar and Thacker (P) Ltd. is an admitted fact and not disputed by Revenue. In such a circumstance, Revenue cannot proceed to recover the Service Tax against the subcontractor, as noted by the Trade Notice No. 53-CE/ST/97 dated 4.9.97 issued by the New Delhi Commissionerate and Counsel also refers to Board Circular dated 7.10.98. He also refers to the Final Order of this Bench No. 1382/06 dated 14.8.2006 rendered in the case Semac Pvt. Ltd. v. CST and also that of Final Order No. 1471/2006 dated 12.9.2006 rendered in the case of BBR (India) Ltd. v. CCE. He submits that in both these rulings, this bench has clearly held that the tax liability cannot be fixed on a sub-consultant and which has to be raised only on the main consultant. He submits that the main consultant admittedly in this case is M/s. Chandravarkar and Thacker (P) Ltd. Bangalore and that the fact of appellant being sub-contractor to M/s. Chandravarkar and Thacker (P) Ltd. Bangalore is not disputed and hence, the demands are not sustainable.
4. The learned JDR contested these submissions and also the citations. He submits that Revenue has not yet filed their appeal against these orders and there is a possibility of Revenue challenging these orders.
5. On a careful consideration, we notice from the records that the appellant never claimed themselves to be 'Interior Decorators'. The application filed by them for registration under Service Tax was under the category of 'Architect'. Since they were wrongly categorized, they contested it before the Department and their plea was accepted and changed their registration within the category of 'Architect'. The fact that they were sub-contractors to M/s. Chandravarkar and Thacker (P) Ltd. Bangalore is not contested by the Revenue, which is mentioned in the impugned order also. Now, the question is as to whether the Service Tax demand can be raised on the sub-consultant. The Tribunal in the above noted judgments has clearly held that the liability to tax arises only against the main consultant and not on the sub-contractor. In this regard, the Board circular cited supra has also issued clarification and Trade Notice has also been issued by New Delhi Commissionerate. The citations, Board Circular and Trade Notice clearly apply to the facts of the case. The demands raised against the sub-contractor for levy of Service Tax are not justified in law and hence, the impugned order is set aside by allowing the appeal with consequential relief, if any.
(Pronounced and dictated in open Court)