2024-VIL-224-CESTAT-KOL-ST
  1. Home
  2. 2024-VIL-224-CESTAT-KOL-ST

SERVICE TAX CESTAT Cases

Service Tax - 'Dredging Services' – Discharge of service tax by main contractor – whether the appellant is liable to pay service as a sub-contractor when the main contractor discharged on the gross amount – appellant submits that when the main contractor has discharged service tax on the gross amount towards the 'Dredging Services' rendered, they were not liable to pay service tax for the 'Dredging Service' as a sub-contractor – HELD - there were confusions regarding the liability for payment of service tax by the sub-contractor, when the main contractor pays service tax on the gross value - the Board issued a clarification vide Circular No. 96/7/2007-ST dated 23.08.2007, clarifying that sub-contractors are liable to pay service tax even if the main contractor pays service tax on the gross value. This Circular, being oppressive in nature towards the sub-contractors, can be applied only prospectively - the sub-contractor is liable to pay service tax even if the main contractor pays service tax on the gross value received, only with effect from 23.08.2007. Hence, the demand confirmed under ‘Dredging Services’ rendered by the Appellant as a ‘sub-contractor’ pertaining to the period 2005-06 and 2006-07, is not sustainable – the issue is answered in favour of appellant - Demand of service tax on the dredging services undertaken by the appellant in the river Daya and at the lagoon of Chilka lake, as a sub-contractor – it is the contention of the Appellant is that there is no service tax leviable on 'Dredging in the lagoons of Chilka lake' – HELD – Vide the Circular F No. B1/6/2005-TRU dated 27.07.2005, it has been clarified that service tax is leviable on dredging of river, port, harbour, backwater or estuary - the dredging work undertaken by the Appellant at the river Daya is in fact the estuary of the river and Chilka lake. Though the appellant contended that major part of the dredging works undertaken by them were related to the Chilka lagoon/lake which would not be liable to service tax, it is observed that in the lake also, the dredging has been undertaken in the Estuary area, which is liable to service tax as clarified in the Board Circular cited above – However, the entire demand in the Show Cause Notice was raised beyond the normal period of limitation. Accordingly, the demand of service tax confirmed on ‘Dredging Services’ in the impugned order by invoking the extended period of limitation is not sustainable and the same is set aside - The penalties imposed on the appellant under Section 78 of the Finance Act, 1994 are set aside, as suppression with intention to evade payment of tax has not been established
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Weekly Summary

VIL Video

VILGST-TAX CONNECT WEBINAR
19th July 2025

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?