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2024 (8) TMI 792 - AT - Service TaxClassification of service - Management, Maintenance, or Repair service - site formation and clearance service - supply of tangible goods services - Inclusion of free supply material in the gross value of construction service. Classification of service - HELD THAT - It is found that as per chart given by the appellant it prima-facie appears that almost all the demands raised by the department are not sustainable. Even in the case of supply of tangible goods, though the invoices pertainto 16.05.2008, but ignoring the vital facts, the demand was confirmed. Inclusion of free supply material in the gross value of construction service - HELD THAT - As regards the free supply of material supplied by the service recipient, the issue is covered by the Larger Bench of this Tribunal in the case of M/S BHAYANA BUILDERS (P) LTD. OTHERS VERSUS CST, DELHI OTHERS. 2013 (9) TMI 294 - CESTAT NEW DELHI-LB which was upheld by the Hon ble Supreme Court in COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. 2018 (2) TMI 1325 - SUPREME COURT . All the other issues, such as repair of roads etc., are prima-facie covered by various notifications. There are no hesitation to state that entire order was passed is without application of mind and without appreciating all the facts and the legal authority for each and every service - the impugned order is set aside - Appeal is allowed by way of remand to the Adjudicating Authority.
Issues:
1. Inclusion of free supply material in the gross value of construction service. 2. Service tax demand for repair of roads classifiable under Management, Maintenance, or Repair service. 3. Service tax demand for road repair classifiable under site formation and clearance service. 4. Service tax allegedly falling under supply of tangible goods services. 5. Service tax on service of PVC rigid pipe laying. Analysis: 1. The appellant challenged the demand of service tax on free supply material in the gross value of construction service. The appellant argued that the value of free supply of material should not be included in the gross value as per relevant notifications and legal precedents. The Tribunal noted that the issue was settled by the Larger Bench in a previous case and upheld by the Supreme Court. The Tribunal found the demand unsustainable and set it aside, allowing the appeal for reconsideration by the Adjudicating Authority. 2. Regarding the service tax demand for repair of roads, the appellant contended that the repair of roads is exempted under relevant provisions and notifications, irrespective of whether the service is related to public or private roads. The Tribunal agreed with the appellant's interpretation and found the demand not sustainable. The impugned order was set aside for reconsideration by the Adjudicating Authority. 3. The demand for service tax on road repair classifiable under site formation and clearance service was also challenged. The appellant argued that this service is exempted under Notification No. 17/2005-ST. The Tribunal concurred with the appellant's submission and held the demand unsustainable, remanding the matter for further consideration by the Adjudicating Authority. 4. The appellant disputed the demand of service tax allegedly falling under supply of tangible goods services, citing that the invoices were issued before the introduction of service tax liability on such services. The Tribunal found the demand unsustainable and set aside the impugned order for reconsideration. 5. Lastly, the appellant defended the service tax demand on the service of PVC rigid pipe laying, asserting that it falls under construction service and abatement was rightly availed. The Tribunal agreed with the appellant's position and allowed the appeal for remand to the Adjudicating Authority for a comprehensive reevaluation of all issues raised. In conclusion, the Tribunal found most of the demands raised by the department unsustainable and set aside the impugned order, remanding the case for reconsideration on all issues. The appeal was allowed for remand to the Adjudicating Authority for a fresh assessment based on the submissions and legal provisions presented by the appellant.
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