Whether information/reply received under RTI Act can be accepted as evidence?

PJ/Case Law /2016-17/3310

Name:- VISESH ENGINEERING CO. Versus COMMISSIONER OF CUSTOMS, EX. & S.T GUNTUR

Citation:- 2016(43) S.T.R. 232 (Tri.- Hyd.)

Brief facts:-The appellant undertook contract work awarded by National Geographical Research Institute, Hyderabad (NGRI), a Government of India undertaking, for conduct of drilling shot holes, seismic job services and topographical survey during the period February, 2008 to May, 2008. The agreement was entered between appellant and Council of Scientific & Industrial Research (CSIR) who had taken up the said project under sponsorship for M/s. Essar Oil Corporation, Mumbai (service recipient). During the course of audit, it was observed that appellants had not discharged their service tax liability on the amounts received as subcontract charges. A show cause notice was issued raising such allegation. The appellant defended the notice contending that the main contractor NGRI has discharged the service tax liability on the amount received from the client and that therefore they are not liable to pay any service tax under the subcontract agreement. After due process of law, the original authority held that appellants are liable to pay the service tax. In appeal, Commissioner (Appeals) upheld the liability to pay the tax but reduced the penalty. Hence the present appeal.

Appellant’s contention:-On behalf of the appellant, it was submitted that NGRI (the main contractor) had taken the job for Rs. 4.8 crore and out of this, work value of only Rs. 2.38 crore was undertaken by appellants. That NGRI who is the main contractor had discharged the liability of service tax on the services rendered. That therefore appellant who is a subcontractor is not liable to pay service tax on the same services. To establish this, appellant furnished information received from NGRI under RTI Act, 2005 showing that NGRI has discharged the service tax liability on the said services. That as the main contractor paid the service tax on the same service for the same period, there would be no tax liability for the appellant who is a subcontractor.

Respondent’s contention:-On behalf of Revenue, the learned AR vehemently argued that appellant failed to establish that service tax liability was discharged by the main contractor, NGRI. That the information/reply received under RTI Act from NGRI is not conclusive proof of payment of tax and cannot be accepted. He pleaded that the appeal may be dismissed.

Reasoning of judgement:-On perusal of records, the main dispute revolves around the question whether the information/reply received under RTI Act can be accepted as evidence. It is seen that the authorities below did not consider the document submitted by appellant i.e. the information received under RTI Act, 2005 on the ground that it is not conclusive proof of payment of tax. On the application filed seeking information regarding the details of payment of service tax paid by NGRI in regard to the contract sponsored by M/s. Essar Oil Ltd. which is subject matter of dispute herein, NGRI has given the details of the payment of service tax. This document shows that out of the value of Rs. 480.15 lakh, the appellant was given subcontract of Rs. 2,38,81,490/-. For the total value of Rs. 480.15 lakhs, NGRI has paid service tax of Rs. 46,48,393/-. It also shows that a balance amount of Rs. 34.56 lakhs is yet to be received by NGRI. The learned AR strongly contended that the information given under RTI cannot be relied to establish discharge of service tax as it is only secondary evidence. Further that an amount of Rs. 34.56 lakhs was pending payment by M/s. Essar Oil Ltd. (service recipient) and that there is no evidence whether service tax on this balance amount is paid or not. The RTI information is seen dated 4-2-2011. The appellant has furnished this document before the original authority. Till this date, the department though contends that it is not conclusive proof has not made any steps to verify the details given as per the information as to whether the liability has been discharged fully by the main contractor (NGRI) as contended by the subcontractor/appellant, as shown in the document. As of now, the RTI information shows that NGRI has discharged the service tax liability. A balance of Rs. 34.56 is yet to be received by NGRI from M/s. Essar Oil Ltd. towards value of contract. The information shows that on the gross amount of Rs. 480.15, NGRI has paid service tax of Rs. 46,48,393/-. The value of contract given to appellant is only Rs. 2.38 crore.
The Tribunal held that the information/document made available by the Public Information Officer (PIO) is something which is already recorded in the official records of the public office/authority. On receiving application, the PIO just furnishes a copy of the information contained in the records kept in proper custody. Also, Section 3 of RTI Act states that every citizen shall have the right to information and may obtain the same by submitting an application. The information so received shows that NGRI has paid service tax on the same services. The information having been provided by a public office under the provision of Right to Information Act, 2005, the tribunal does not find any reason to disbelieve the same. The Tribunal in Urvi Construction v. CST, Ahmedabad [2010 (17) S.T.R. 302 (Tri.-Ahmd.)] and in Nana Lai Suthar v. CCE, Jaipur-I [2015-TIOL-2357-CESTAT-DEL] have held that when main contractor has discharged the service tax liability, there can be no demand against the subcontractor for the same services for the same period. Following the dictum laid in the cases cited supra, the Tribunal held that appellants have succeeded in establishing a case in their favour.
In the result, the impugned order is set aside. The appeal is allowed with consequential reliefs, if any.

Decision:- Appeal allowed.

Comment:-The gist of the case is that the assessee undertook contract work of Seismic Job and Topographical Survey services and the service tax was paid by main contractor. In view of Tribunal’s decision in 2010 (17) S.T.R. 302, service tax is not demandable from sub-contractor when main contractor has discharged Service Tax on same activity for same period. Hence demand was set aside. Further, there is no reason to disbelieve the information provided by a public office under RTI Act regarding payment of service tax by the main contractor as information provided by CPIO is always as per official records. It was for Department to verify details which they failed to do.

Prepared by:- Praniti Lalwani

Comments

PJ/Case Law /2016-17/3310

Post a Comment

Query