2016 (7) TMI 501 - AT - Service Tax

Valuation - Claim of abatement of 67% availed without including the value of the material supplied free of cost by their customers in the gross amount charged. - Commercial or Industrial Construction Service - Held that - Following the aforesaid ratio of the Larger Bench of the Tribunal 2013 (9) TMI 294 - CESTAT NEW DELHI (LB) , the impugned order passed by the learned Commissioner confirming the demand of Service Tax by including the value of free issue material in gross taxable value and imposition of penalty cannot be sustained.

Summary

Issues Involved:
1. Interpretation of Notification No.15/2004-ST regarding abatement of service tax for Commercial or Industrial Construction Service.

Analysis:
The appeal in question was filed against an order passed by the Commissioner, C.Ex. & S.Tax, Vadodara-I, regarding the alleged wrong availment of benefit under Notification No.15/2004-ST by the Appellant, who provided taxable service under the category of Commercial or Industrial Construction Service. The issue revolved around the inclusion of the value of free issue material supplied by clients in the gross taxable value for availing the benefit of the said notification. Both parties agreed that this issue had been settled by the Larger Bench of the Tribunal in the case of Bhayana Builders (P) Ltd. Vs Commissioner of Service Tax, Delhi. The Larger Bench concluded that the value of goods and materials supplied free of cost by a service recipient should be excluded from the taxable value or the gross amount charged for the service provider. Therefore, the impugned order confirming the demand of Service Tax and imposing a penalty based on including the value of free issue material in the gross taxable value was set aside, and the appeal was allowed accordingly, with consequential relief as per law.