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If contractor paid full ST, sub-contractor is not liable for any part of it.
If contractor paid full ST, sub-contractor is not liable for any part of it.
As per CENVAT Credit Rules, 2004, all persons are liable to pay service tax on services provided by them with Cenvat credit benefit if any. Here, it was practice of contractors to pay ST on full value; hence, separate confirmation of demand against sub-contractors would be unjustified, even if Cenvat credit rules may require otherwise.-007548
1. Assessee, a sub-contractor.
2. Assessee did not pay service tax on services provided to main contractor, as full service tax had been paid by main contractor.
3. Department argued that after introduction of CENVAT Credit Rules, 2004, all persons are liable to pay service tax on services provided by them with Cenvat credit benefit, if any.
4. HELD- CESTAT cleared that here, it was practice of contractors to pay service tax on full value; hence, separate confirmation of demand against sub-contractors would be unjustified, even if Cenvat credit rules may require otherwise.
5. And, where principal contractor has paid tax on entire value, revenue has already earned its share of tax whether coming from main contractor or from sub-contractor and earlier clarifications of Board and judgments of Tribunal also favoured sub-contractors.
6. This was a general practice/pattern in industry ex-chequer cannot be enriched on account of double taxation and entire situation is revenue neutral.
7. Hence, demand was set aside.[In favour of assessee]
Case Reference- DNS Contractor v. Commissioner of Central Excise, Delhi-I
(CESTAT, NEW DELHI BENCH)
[2015] 58 taxmann.com 154 (New Delhi - CESTAT)
