2026-VIL-273-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Invocation of extended period of limitation for non-payment of service tax by a sub-contractor – Non-payment of service on the ground that the principal contractors had discharged the service tax liability - Whether the invocation of extended period of limitation against the appellant for non-payment of service tax is justified – HELD - After the issuance of the Master Circular No. 96/7/2007-S.T. dated 23.08.2007 by the Board, which clarified that even when the principal contractor discharges the service tax liability, the sub-contractor shall be liable to pay service tax, there were conflicting decisions by various Benches of the Tribunal on the issue of liability of a sub-contractor to pay service tax - When there are divergent views of Courts/Tribunals on a particular issue, the assessee may have a bona fide belief that service tax is not payable, and in such situations, the extended period of limitation cannot be invoked by the Department - The issue of liability of a sub-contractor to pay service tax was finally settled by the Larger Bench of the Tribunal in the case of CST, New Delhi v. Melange Developers Pvt. Ltd. on 23rd May, 2019, whereas the show cause notice in the present case was issued on 07.01.2014, i.e., during the period when there were conflicting decisions on the issue - In view of the above, the extended period of limitation was not invocable in the present case. The impugned order is set aside, allowing the appeal by the appellant
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