2026-VIL-1171-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax – Extended Period of Limitation – Revenue Neutral Case - Whether demand of service tax can be raised under extended period of limitation when the transaction is revenue neutral as the assessee could have immediately taken CENVAT credit of the service tax paid and utilized it to pay its own service tax liability, thus showing no intention to evade – HELD - Extended period notice can be issued only when non-payment of service tax is by reason of fraud or collusion or wilful mis-statement or suppression of facts or violation of the Act or Rules with intent to evade payment of service tax. When demand is on reverse charge and the assessee could have immediately taken CENVAT credit of the service tax paid, the entire demand becomes revenue neutral and it cannot be alleged that the assessee had any intention to evade. The impugned order confirms demand made under extended period which is fully beyond the normal period of limitation and hence cannot be sustained on this ground alone - The appeal is allowed and the order is set aside - Whether amounts paid by the assessee to petty contractors for execution of work constitute manpower supply service attracting service tax under reverse charge – HELD - The nature of service depends on what was the contract for. Amounts paid to contractors for executing any work cannot be called a contract for supply of manpower. The assessee is not paying the contractors for supplying manpower but for the work itself. There is no privity of contract between the assessee and the workers as the workers work for the contractor and get paid by him. The contractor completes the work and the assessee pays him for work completion. This cannot be characterized as manpower supply service - The demand on this count is dropped - Manpower Supply – Direct Employment of Labourers - Whether amounts paid by the assessee to its labourers, whether regular or adhoc, constitute manpower supply service attracting service tax under reverse charge – HELD - The amounts paid directly by the assessee to its labourers, whether regular or adhoc, cannot be called manpower supply service. However, the verification is required to determine if someone acted as a manpower supplier and if wages in names of several labourers were received by a single person indicating that person as the supplier. If manpower supply service is established, the Commissioner must determine the exact amount of service tax payable under reverse charge. Any service tax determined and paid will be refundable to the assessee as per section 142(7)(b) of the CGST Act, 2017 - Reverse Charge – Works Contract Service – CA Certificate Break-up - Whether service tax under reverse charge can be charged on repair and maintenance expenses without separately identifying actual works contract services from other expenses – HELD - The assessee was not required to pay service tax on purchase of items as they are not services. Service tax also does not apply to pure repairs as they do not constitute works contracts. Where services were received from corporate bodies, no reverse charge applies. The assessee has already paid service tax under reverse charge on works contract services received from non-corporate service providers. In view of the CA certificate's break-up and explanation provided, the demand under this head cannot be sustained - The demand for works contract service is dropped - GTA Service – Absence of Consignment Note - Whether service tax under reverse charge can be charged on transport related expenses in the absence of a consignment note or involvement of a goods transport agency - HELD - Unless a goods transport agency is involved and a consignment note is issued, no service tax can be charged under reverse charge on the assessee. General transport expenses without consignment notes do not constitute GTA services - The demand for GTA service is dropped.
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