2016 (7) TMI 1663 - AT - Service Tax

Valuation of services - works contract service - inclusion of value of the free supplied items by the appellant from service recipients in the value of the services - whether the works contract were liable to tax before 01/6/2007 - HELD THAT - The issues stand decided by the Larger Bench decision of the Tribunal in the case of M/S BHAYANA BUILDERS (P) LTD. OTHERS VERSUS CST, DELHI OTHERS. 2013 (9) TMI 294 - CESTAT NEW DELHI (LB) as also by the Hon ble Supreme Court decision in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT . At this stage, learned DR submits that the matters may be remanded to the original Adjudicating Authority for examining the applicability of the said decision to the fact of the case in as much as number of contracts are involved and the other issues regarding the non-payment of tax in respect of various charity/educational/non-commercial contracts are also involved. The impugned orders is set aside and both the appeals remanded to the original Adjudicating Authority for denovo adjudication in the light of the above declarations of law - appeal allowed by way of remand.

Summary

Issues:
1. Whether the value of free supplied items by the appellant from service recipients should be added to the value of services.
2. Whether works contracts were liable to tax before 01/6/2007.

Analysis:
1. The Tribunal found that the issues raised in the present appeals had already been addressed in the Larger Bench decision of the Tribunal in the case of Bhayana Builders Pvt. Ltd. and the Supreme Court decision in the case of CCE, Kerala vs. M/s Larsen & Toubro Ltd. The learned DR suggested remanding the matters to the original Adjudicating Authority for a fresh examination of the applicability of the aforementioned decisions to the facts of the case, considering the complexity involving multiple contracts and issues related to non-payment of tax for various charity/educational/non-commercial contracts. The appellant's advocate expressed no objection to the remand for a fresh decision based on the legal principles established in the referred judgments.

2. Consequently, the Tribunal set aside the impugned orders and remanded both appeals to the original Adjudicating Authority for denovo adjudication in light of the legal declarations made in the earlier judgments. It was emphasized that the appellants must be given a reasonable opportunity to present their case before a final decision is reached. The decision was dictated and pronounced in open court by the Tribunal members.

This summary outlines the key issues addressed in the judgment, the legal precedents relied upon, and the decision to remand the appeals for further consideration by the original Adjudicating Authority in accordance with established legal principles.