2014 (7) TMI 631 - AT - Service Tax

Valuation - commercial or industrial construction service - irregular availment the benefit under abatement Notification No. 15/2004-ST dated 10.9.2004 - Failure to disclose the value of goods supplied free of cost (by service recipients to the appellant service provider) for incorporation into the commercial or industrial constructions made for the benefit of the recipients - Held that - Larger Bench of this Tribunal in Bhayana Builders (P) Ltd. Vs. Commissioner of Service Tax. Delhi 2013 (9) TMI 294 - CESTAT NEW DELHI , has interpreted the scope of abatement Notification No. 15/2004-ST and Notification No. 1/2006-ST dated 1.3.2006 to conclude that these notifications authorise availment of the abatement benefits provided therein, without the necessity of having to disclose and offer for tax the value of free supplies made by the service receivers to the service provider, of goods meant for incorporation into works executed for recipients - Decided in favour of assessee.

Summary

Issues:
Appeal against adjudication order confirming service tax liability, interest, and penalties for under remittance of service tax due by irregularly availing abatement benefits and failing to disclose the value of free goods supplied for incorporation into constructions.

Analysis:
The appeals were filed against an adjudication order confirming service tax liability, interest, and penalties due to under remittance of service tax by irregularly availing abatement benefits and not disclosing the value of free goods supplied for incorporation into constructions. The appellants were found to have provided commercial or industrial construction services under Notification No. 15/2004-ST dated 10.9.2004. Despite the absence of the appellant's counsel during the hearing, the Tribunal proceeded to consider the stay application. The Tribunal heard the ld. DR for Revenue/respondent and decided to dispose of the substantive appeals as the issues were already addressed by the judgment of the Larger Bench. The Tribunal waived the pre-deposit requirement and proceeded with the disposal of the appeals, as the issue was decided in favor of the assessee by the Larger Bench's order.

The Larger Bench had previously interpreted the scope of abatement Notification No. 15/2004-ST and Notification No. 1/2006-ST dated 1.3.2006 in the case of Bhayana Builders (P) Ltd. Vs. Commissioner of Service Tax. Delhi 2013 (32) STR 49 (Tri.-LB). The Larger Bench concluded that these notifications allowed the availing of abatement benefits without the obligation to disclose and offer for tax the value of free supplies made by service receivers to the service provider for incorporation into the works executed for recipients. Based on this interpretation, the impugned adjudication order, which relied on a different understanding, was deemed unsustainable and subsequently quashed. The appeals were allowed, and no costs were awarded.

In light of the legal pronouncement by the Larger Bench in Bhayana Builders Pvt. Ltd., the Tribunal found the impugned adjudication order unsustainable and quashed it, allowing the appeals filed by the appellants. The Tribunal emphasized that the notifications in question permitted the availing of abatement benefits without the requirement to disclose the value of free supplies incorporated into the constructions. The decision highlighted the importance of adhering to the interpretations provided by higher judicial authorities, ultimately leading to the success of the appeals filed by the appellants.