2017 (5) TMI 1025 - AT - Service Tax

Commercial or industrial construction service - Abatement - N/N. 1/2006-ST - Held that - the appellant assessee is entitled to the abatement of 67 % under N/N. 1/2006-ST as per the CESTAT decision in the case of M/s Bhayana Builders Pvt Ltd VSC CCE 2013 (9) TMI 294 - CESTAT NEW DELHI (LB) , where it was held that Value of free supplies by service recipient do not comprise the gross amount charged under N/N. 15/2004-ST, including the Explanation thereto as introduced by N/N. 4/2005-ST - What would be the quantum of the liability of service tax against the assessee appellant, once benefit of 67% abatement is given to them, is required to be computed - appeal allowed by way of remand.

Summary

Issues:
- Demand of service tax under 'commercial or industrial construction service'
- Benefit of abatement under Notification 1/2006
- Exclusion of value of materials in the contract
- Applicability of abatement even if materials supplied by the customer
- Claiming exemption at the appellate stage
- Quantum of liability of service tax after abatement

Analysis:
The case involved an appeal against an Order-in-Original confirming a demand of service tax under the category of 'commercial or industrial construction service' for a specific period. The appellant contended that the demand was made without granting the benefit of abatement under Notification 1/2006. They also sought exclusion of the value of materials in the contract, which was disallowed due to lack of separate material value in the invoices. The appellant alternatively claimed the benefit of abatement under Notification 1/2006, citing a precedent where such abatement was allowed even if materials were supplied by the customer.

The appellant relied on various decisions to support their claim, emphasizing that exemption could be claimed at the appellate stage. The learned Advocate reiterated the findings of the impugned order, leading to a detailed consideration of the case by the Tribunal. The Tribunal, after analyzing the facts and submissions, held that the appellant was entitled to a 67% abatement under Notification no. 1/2006-ST based on a previous CESTAT decision. The Tribunal referred to the case of Bhayana Builders Pvt Ltd and concluded that the value of goods and materials supplied free of cost should be excluded from the taxable value.

Following the decision in Bhayana Builders Pvt Ltd, the Tribunal allowed the appeal by remanding the case to the adjudicating authority. The adjudicating authority was directed to determine the quantum of liability of service tax after giving the benefit of abatement as per the earlier CESTAT decision. The matter was to be re-adjudicated by the authority, providing the appellant with a fresh opportunity for a personal hearing and submission of documents. Ultimately, the appeal was allowed by way of remand for further assessment of the liability of service tax after considering the abatement.