CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL ALLAHABAD REGIONAL BENCH - COURT NO.I (Arising out of Order-in-Appeal No.885/ST/ALLD/2023 dated 21.04.2023 passed by Commissioner (Appeals) Customs, CGST & Central Excise, Allahabad)

Shri Ram Surat Maurya, Prop – M/s S K & Company …..Appellant (R/o Haidarpur Sadar, Jaunpur-222001 U.P.)

VERSUS Commissioner of Central Excise &

CGST, Allahabad ….Respondent (38, M.G. Marg, Civil Lines, Allahabad-211001)

APPEARANCE Shri Ramji Khare, Advocate & Shri S.P. Mishra, Consultant for the Appellant Shri Manish Raj, Authorized Representative for the Respondent FINAL ORDER NO.- 70511/2025 DATE OF HEARING : 04.04.2025 DATE OF PRONOUNCEMENT : 22.07.2025 The present appeal has been filed by the Appellant assailing the Order-in-Appeal No.885/ST/ALLD/2023 dated 21.04.2023 passed by the learned Commissioner (Appeals) Customs, CGST & Central Excise, Allahabad.

2. The facts of the case in brief are that on the basis of third party information received from the Income Tax Department for the Financial Year 2016-17 a show cause notice, CORAM: HON’BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) dated 19.10.2021 was issued proposing to demand service tax amounting to Rs.9,57,881/- on the alleged gross receipts of

1 SCN

demand as proposed in the SCN was confirmed and equal amount of penalty under Section 78 and penalty of Rs.10,000/- each under Sections 77(1)(a), 77(2) & 77(1)(c) of the Finance Act, 1994 and late fee of Rs.40,000/- for non filing ST-3 returns under Section 70 of the Finance Act, 1994. Being aggrieved, the Appellant assessee filed the appeal before the first Appellate Authority and the learned Commissioner (Appeals) re-quantified the demand as under:-

S. No.	Gross Amount	Taxable amount (40% of total amount)	Total S. Tax involved (@ 15%)	Liability of S. Tax on appellant (50%)
1.	6385870	2554348	383152	191576

However, it is the case of the Appellant that their entire service tax liability has been discharged by the service recipient and therefore they are not liable for payment of service tax. Accordingly, the assessee has filed the present appeal before the Tribunal.

3. Learned Advocate appearing on behalf of the Appellant submitted that they have received the entire payment from M/s U.P. State Construction Infra Structure Development Corporation Ltd, Rs.63,85,870/- Vide the Order-in-Original dated 07.01.2023 the., Jaunpur for providing Works Contract Service to Shri Veer Bahadur Singh Poorvanchal University, VBSP University, Jaunpur and Gram Panchayat against the work orders issued by the main contractor

2 SIDCO

SIDCO. The entire service tax liability arising there on has been borne by the main contractor i.e. SIDCO. They have produced a certificate dated 27.01.2023 issued by the Executing Engineer U.P. SIDCO, Jaunpur mentioning that the entire liability of service tax has been paid by them. It is his submission that in the impugned order, the learned Commissioner (Appeals) has observed that 50% liability of service tax is to be discharged by the said recipient for works contract service rendered to a body corporate i.e. SIDCO and the liability of 50% service tax lies upon the Appellant being the service provider.

4. The learned Departmental Authorized Representative justified the impugned order and prayed that the appeal filed by the Appellant, being devoid of any merits, may be dismissed.

5. Heard both the sides and perused the appeal records.

6. I find that the Appellant is a sub contractor of SIDCO. It is undisputed fact that the entire liability of service tax including the part of liability payable by the Appellant has also been discharged by the main contractor. Thus, there is no loss of revenue to the Government exchequer. In the present case the amount of service tax if collected from the Appellant would amount to double taxation, which is not justified. It is also submitted by the learned Advocate that had the service tax been paid by the Appellant, the same would have been av

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