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2015 (8) TMI 154 - AT - Service TaxDenial of exemption claim - Benefit of abatement under Notifications No. 19/2003-ST and 1/2006-ST - Held that - Prima facie, the benefit of exemption Notifications No. 19/2003-ST and 1/2006-ST providing for 67% abatement has been denied on the ground that the value of free supply materials was not included in the gross amount received for providing erection, commissioning or installation service - prima facie the issue is covered in favour of the appellant by the judgement of CESTAT Larger Bench in the case of Bhayana Builders (2013 (9) TMI 294 - CESTAT NEW DELHI (LB)). - Stay granted.
Issues:
Service tax demand confirmation based on non-application of exemption notifications due to exclusion of value of free supplies in gross amount received. Analysis: The appellant filed a stay application and appeal against the order-in-appeal confirming a service tax demand of Rs. 7,13,098/- along with interest and penalties. The demand was upheld as the appellant paid service tax on only 33% of the gross amount received, excluding the value of free supplies, thereby not meeting the criteria of Notifications No. 19/2003-ST and 1/2006-ST. The appellant argued that it paid Rs. 1,91,700/- towards the tax liability and deposited Rs. 44,436/- as interest, claiming entitlement to a 67% abatement under the said notifications, citing the judgment of CESTAT Larger Bench in the case of Bhyana Builders Vs. CCE. Upon considering the contentions, the Tribunal noted that the benefit of the exemption notifications providing for 67% abatement was denied due to the exclusion of the value of free supply materials from the gross amount received for services. The Tribunal found that the issue was prima facie covered in favor of the appellant by the judgment of CESTAT Larger Bench in the case of Bhayana Builders. Consequently, given that the appellant had already made partial payments towards the tax liability and interest, the Tribunal waived the requirement of further pre-deposit and stayed the recovery of the remaining amount during the appeal's pendency.
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