2015 (3) TMI 1215 - AT - Service Tax

Service tax liability - Commercial and Industrial Construction Service - free supply of cement and steel by the service recipient to the appellant - Held that - the issue is no more res integra as the Larger Bench of this Tribunal in the case of Bhayana Builders (P) Ltd. v. CCE 2013 (9) TMI 294 - CESTAT NEW DELHI (LB) is directly on the point and is in favour of the assessee. Therefore, by respectfully following the said Larger Bench s decision, we hold that the impugned order is unsustainable and liable to be set aside. - Decided in favour of appellant

Summary

Issues:
Demand of service tax liability on the value of the free supply of cement and steel to the appellant while executing the contract.

Analysis:
The appeal was directed against Order-in-Original No. 1/ST/2010 passed by the Commissioner of Central Excise, Kolhapur. After hearing both sides and perusing the records, it was noted that the adjudicating authority confirmed the demand of service tax liability, interest, and penalties on the appellant under the category of "Commercial and Industrial Construction Service." The issue revolved around the liability to pay service tax on the free supply of cement and steel by the service recipient to the appellant during the contract execution. Both parties agreed that the key issue was the demand of service tax liability on the value of the free supply of cement and steel. It was acknowledged that a Larger Bench decision in the case of Bhayana Builders (P) Ltd. v. CCE had already settled this issue in favor of the assessee. Consequently, following the precedent, the Tribunal held that the impugned order was unsustainable and set it aside, allowing the appeal with any consequential relief.

Conclusion:
The Tribunal's decision was based on the interpretation of the demand of service tax liability on the value of the free supply of cement and steel during contract execution. By relying on the precedent set by the Larger Bench in a similar case, the Tribunal found in favor of the appellant, setting aside the impugned order and allowing the appeal with any necessary consequential relief.