IMPORTANT POINT
The interpretation issue about the liability and the bona fide belief of the respondent indicated that there was no deliberate suppression of facts to evade payment of service tax, justifying the remittal of the case to recalculate the service tax liability without invoking the proviso that seeks to extend the period of limitation.

JUDGMENT :

Goutam Bhaduri, J.

1. The present appeal is filed against the order dated 1-8-2019 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi (for short ‘the Tribunal’) in Service Tax Appeal No.51270 of 2015-DB whereby the case of the respondent herein was remitted afresh to the Commissioner to calculate the service tax liability for the period prescribed under Section 73 (1) of the Finance Act, 1994 (for short ‘the Act’) without invoking the proviso that seeks to extend the period of limitation. Being aggrieved by such order the present appeal by the Department.

2. (i) The facts of the case, in brief, are that an appeal was preferred by the respondent herein Mammen Engineering Works before the Tribunal against the order dated 17-12-2013 passed by the Commissioner, Central Excise & Customs, Raipur, whereby the demand of service was confirmed and the interest & penalty was further levied.

(ii) Admittedly, the respondent is a sub contractor, who had received payment of Rs.19,30,94,411=00 for fabrication, erection and commissioning work of the main contractors namely; M/s Gannon Dunkerley & Co. Limited, New Delhi and M/s Viraj Steel & Energy Limited, New Delhi. According to it, they did not pay the service tax on the plea that same was required to be paid by the main contractor and the main contractor had also discharged the tax liability and had given a certificate to the respondent.

(iii) According to the respondent, during the course of audit it came to fore that in the service tax return ST-3 the respondent has not shown or paid the service tax, therefore, since the liability to pay the service tax was on the respondent according to Section 71A and the circular issued by the Central Government the respondent was duty bound to show the payment of service tax or its entry in the return.

(iv) The show cause notice dated 19-10-2012 was issued that for the financial year 2007-08, 2008-09, 2009-10 and 2010-11 and the trial balance sheet for the financial sheet for financial year 2011-12 (up to December, 2011) the respondent as a sub contractor received the payment from the main contractor but had not paid the service tax. Consequently, as per the circular dated 4-1-2008 issued by the Central Board of Excise and Customs the extended period of limitation was invoked.

(v) The respondent replied to the said show cause notice stating that the main contractors had already made payment of service tax, therefore, they did not collect the service tax from the main contractor and the levy of tax was not justified. It was further stated that had there been payment of service tax there would have been double taxation and the work order also contains stipulation that the main contractor would bear the service tax payment. It was also stated that the respondent has paid the service tax regularly but for the works under the sub contract, it had not paid the service tax for a bona fide reason that the issue was under consideration in a reference matter about the liability of payment of service tax coupled with the fact that the same was actually deposited by the main contractor.

(vi) The Commissioner held it against the respondent, which was challenged before the Tribunal and the Tribunal has passed the order impugned by remitting back the case to the Commissioner to recalculate for the period prescribed under Section 73(1) of the Act without invoking the proviso that seeks to extend the period of limitation. Being aggrieved by such order, this appeal by the Department.

3. Learned counsel for the appellant/Department would submit that as per Section 71A of the Act to pay service tax is mandatory and Section 73 which is akin to Section 11A of the Central Excise Act, 1944 (for short ‘the Act, 1944’) extend the period of limitation in case of fraud collusion willful misstatement or suppression of facts contravention of any provisions. He would further submit that under these circumstances when the statute mandates to file return whic