- (1.) The order dated November 12, 2013, passed by the Customs, Excise and Service Tax Appellate Tribunal, Kolkata, is the subject-matter of challenge in this writ petition. A show-cause notice was issued upon the petitioners upon invocation of the extended period provided under Explanation to section 73(1) of the Finance Act, 1994. The proceeding initiated on the basis of the said show-cause notice culminated into an order passed by the assessing authority which is further assailed before the Tribunal. From the said show-cause notice it appears that the extended period was pressed in service on the plea of willful misstatement or suppression of facts. According to the petitioners, all necessary statements required to claim an exemption from payment of the service tax to an amount received or the amount billed as a sub-contractor were provided. The petitioners say that there was no misstatement and/or suppression of facts and, therefore, the authorities could not have initiated a proceeding by taking shelter under the extended period. The Department on the other hand proceeded to pass the order holding that the petitioners have made a willful misstatement and suppressed the material facts and imposed the liability of payment of the service tax upon the petitioners. In course of the proceeding, it appears that a stand was taken by the petitioners that the work which they did as a sub-contractor under its principal, the service tax has been paid by the said principal and, therefore, there cannot be a double taxation for the same services. In an appeal before the Tribunal an application seeking waiver of the pre-conditioned deposit of the service tax is taken out which came to be disposed of by the impugned order. The meaningful reading of the order impugned in this writ petition would suggest that the Tribunal has relied upon the principle laid down in case of Vijay Sharma and Company v. CCE, Chandigarh,2010 20 STR 309 to record that the service tax liability could be fastened on the sub-contractor for the services so rendered. The Tribunal further proceeds to record that the onus lies on the petitioners to prove the payment of the service tax by the principal-contractor and having failed to discharge such onus, the liability for payment of the service tax can be imposed upon the petitioners. On the point of invocation of the extended period of limitation, the Tribunal records that it is undisputed that the petitioners have deposited the service tax received for the services rendered as a contractor but failed to pay the service tax for the services rendered as a sub-contractor. On the above conclusion, the Tribunal held that the entire demand is not barred by limitation.
(2.) The aforesaid finding of the Tribunal is not based on the materials and the facts on record. The show-cause notice never suggests that the petitioners are guilty of non-deposit of the service tax for the services rendered as a contractor but the entire gamut of dispute rests upon the non-deposit of the service tax for the services rendered as a sub-contractor.
(3.) My attention is drawn to the circular dated August 23, 2007, wherein the Department clarified that a sub-contractor is essentially a taxable service provider and such services are in the nature of input services. According to the petitioners, the Department itself was uncertain whether the services rendered by the sub-contractor could at all be brought within the purview of taxable service attracting the service tax and such anomaly was clarified by issuing the aforesaid circular. This court, therefore, finds that all these aspects have not been dealt with by the Tribunal but the Tribunal has proceeded in a circuitous manner which is not sustainable. There is no recording of the Tribunal on the merits and this court, therefore, feels the said application should be considered afresh. Accordingly, this court quashed and set aside the impugned order. The Tribunal is directed to consider the application filed by the petitioners afresh after giving an opportunity of hearing as well as upon consideration of the materials produced before it and shall dispose of the same by passing the reasoned order in accordance with law. It is expected that the Tribunal would complete the exercise as indicated above within three weeks from the date of communication of this order. For abundant precaution, it is hereby mentioned that this order shall not be construed to have any impact on the reconsideration of the said application by the Tribunal but the Tribunal shall decide the same independently and without being influenced by the observations made herein. With these observations, the writ petition is disposed of. No costs.;