Section 65(97a) ;Sub-contractor wasn't liable to pay service tax

Sub-contractor wasn't liable to pay service tax if contractor had paid tax on full value of services

[2015] 57 taxmann.com 433 (Chhattisgarh)

HIGH COURT OF CHHATTISGARH

Sew Infrastructure Ltd.

v.

Commissioner of Central Excise & Customs, Raipur

Section 65(97a), read with section 66 of the Finance Act, 1994 - Taxable services - Site Formation and Clearance, Excavation and Earthmoving and Demolition Services - Period 8-7-2005 to 7-8-2006 - BESCL gave a contract to set up an electric power plant to BHEL - BHEL sub-contracted 'land development work' to assessee - Department demanded service tax from assessee - Assessee argued that since it was sub-contractor, it was not required to pay service tax inasmuch as service tax was paid by contractor BHEL - Tribunal held that in absence of any immunity to sub-contractor, sub-contractor is liable to pay service tax - HELD : There is substance in assessee's contentions - However, High Court cannot finally decide this point as there is no finding by lower authorities/Tribunal as to whether BHEL has paid Service Tax for services rendered by assessee - Hence, keeping all points open, matter was remanded back for consideration afresh [Paras 17 to 21] [In favour of assessee/Matter remanded]

Circulars and Notifications : Instruction F. No. B-43/5/97-TRU, dated 2-7-1997, Instruction F. No. B-11/3/98-TRU, dated 7-10-1998