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2022 (11) TMI 1042 - AT - Service TaxLevy of Service tax - service in relation to laying of pipeline - commercial and industrial construction service - inclusion of value of pipes supplied free of cost by the recipient of service in the taxable value - HELD THAT - The appellant had taken a definite stand before the Original Adjudicating Authority that they are not required to discharge the service tax on the pipe which are supplied by the service recipient during providing of services. Since the original adjudicating authority decided the matter on limitation and dropped the quantum of demand, appellant not challenged the said finding before the Ld. Commissioner (Appeals). Non-inclusion of cost of the material received from the service receivers in the gross value of the services provided - HELD THAT - This issue is no more res integra in view of the decision of 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) in favour of the assessee. Hence, the demand of Service Tax on this issue cannot be sustained. The Ld. Adjudicating Authority had not given any finding on these issues that whether the value of pipes supplied by the recipient of service is to be included in the value of calculation of service tax or not - the Adjudicating Authority should have examined the matter afresh in detail before passing the impugned order. He is also required to examine the claim of the appellant on limitation also. Matter remanded to the Adjudicating Authority to decide the impugned matter afresh - appeal allowed by way of remand.
Issues:
1. Appellant providing services under the wrong category. 2. Short payment of service tax by the Appellant. 3. Discrepancy in the value of pipes supplied by the recipient of service. 4. Adjudicating authority's decision on limitation and demand confirmation. 5. Non-inclusion of material cost in the gross value of services provided. Detailed Analysis: 1. The appeals were against the Order-In-Appeal passed by the Commissioner (Appeals), Ahmedabad, where the Appellant's service was categorized incorrectly under erection, commissioning, and installation services instead of commercial and industrial construction services. The Appellant had short paid service tax, leading to a demand notice for the differential gross value. The Adjudicating Authority confirmed a partial demand, dropping the rest as time-barred. The appeals arose from this order. 2. The Adjudicating Authority issued a show cause notice for including the value of pipes supplied by the service recipient in the taxable value, demanding service tax. The lower authority confirmed part of the demand but dropped the rest due to limitation. The Commissioner (Appeals) upheld the service tax demand based on the value of pipes supplied, which was not challenged by the Appellant. 3. The first issue was the non-inclusion of the cost of material received from service receivers in the gross value of services provided. The Tribunal's decision in the case of M/s. Bhayana Builders Pvt. Ltd. v. CST, Delhi I favored the assessee on this issue, rendering the service tax demand unsustainable. 4. However, the Adjudicating Authority did not address whether the value of pipes supplied by the recipient should be included in the calculation of service tax. The Tribunal remanded the matter to the Authority for a detailed re-examination, emphasizing the need to consider the appellant's claim on limitation and provide a fair hearing before passing a new order. 5. The judgment was pronounced on 21.11.2022 by the Appellate Tribunal CESTAT AHMEDABAD, highlighting the need for a fresh examination of the issues related to the value of pipes supplied by the service recipient and the inclusion of material costs in the gross value of services provided.
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