2014 (7) TMI 793 - AT - Service Tax

Valuation of goods - whether the materials supplied free of cost by the service recipient used in the construction would be included in the taxable value - Held that - Following decision of Bhayana Buildings (P) Ltd. Vs. Commissioner of Service Tax, Delhi 2013 (9) TMI 294 - CESTAT NEW DELHI - It is held that the value of goods and materials supplied free of cost by service recipient to the provider for incorporation in constructions would neither constitute non-monetary consideration to service provider nor form part of gross amount would be outside the taxable value - matter remanded back - Decided in favour of assessee.

Summary

Issues Involved:
1. Taxable value determination concerning materials supplied free of cost by the service recipient for construction services.

Analysis:

1. The appeal before the Appellate Tribunal CESTAT CHENNAI involved a dispute regarding the inclusion of materials supplied free of cost by the service recipient in the taxable value for services provided by the appellants under various categories. The Tribunal referred to a precedent set by the Larger Bench in the case of Bhayana Buildings (P) Ltd. Vs. Commissioner of Service Tax, Delhi 2013, which established that such materials do not constitute non-monetary consideration to the service provider and should be excluded from the taxable value.

2. Upon reviewing the impugned order and the precedent, the Tribunal decided to set aside the order and remand the matter to the adjudicating authority. The Tribunal directed the adjudicating authority to reconsider the case in light of the decision of the Larger Bench. It was emphasized that the appellant must be given a fair opportunity to present their case during the fresh adjudication process. The appeal was allowed by way of remand, and the stay application was disposed of.

3. The judgment was delivered by P K Das of the Appellate Tribunal CESTAT CHENNAI. The decision highlighted the importance of following the precedent set by the Larger Bench in determining the taxable value of services involving materials supplied free of cost by the service recipient. The case was remanded for a fresh decision by the adjudicating authority, ensuring a fair hearing for the appellant in the process.