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2017 (8) TMI 904 - AT - Service TaxN/N. 01/2006-ST - Valuation - includibility - construction service - materials such as, cement and steel was provided by the service recipient, M/s. Ultra Tech Cement Ltd. free of cost to the appellant - when the value of free supplied material is not included in the gross value of construction service, whether abatement N/N. 01/2006-ST is available to the assessee? - Held that - The fact is not under dispute that whatever material used by the appellant for providing services for construction have been included in the gross value - it has been held by the Larger Bench of this Tribunal in the case of Bhayana Builders (P) Ltd. 2013 (9) TMI 294 - CESTAT NEW DELHI (LB) that in order to allow the abatement in terms of N/N. 01/2006-ST, the value of free supplied material by the service recipient need not to be included - appeal allowed - decided in favor of appellant.
Issues involved:
1. Whether the value of free supplied material by the service recipient should be included in the gross value for claiming abatement under Notification No.1/2006-ST. Detailed Analysis: 1. The appellants provided commercial and industrial construction services to a company, using sand and stone provided by themselves and cement and steel provided free of cost by the service recipient. A show-cause notice was issued for denial of abatement under Notification No.1/2006-ST, resulting in a demand for differential service tax. The appeal was filed against the order-in-original which confirmed the demand, interest, and penalty. The Commissioner (Appeals) upheld the original order, leading to the current appeal before the Tribunal. 2. The appellant argued that they included the value of materials used by them in the construction service and claimed a 67% abatement under Notification No.1/2006-ST. They contended that the value of free material provided by the service recipient should not be included in the gross value. The appellant cited various judgments, including Bhayana Builders (P) Ltd, to support their position. The department reiterated the findings of the impugned order. 3. The Tribunal considered the central issue of whether the value of free supplied material should be included in the gross value for availing abatement under Notification No.1/2006-ST. It was noted that the material used by the appellant for providing construction services was already included in the gross value. Citing the decision of the Larger Bench in Bhayana Builders (P) Ltd., the Tribunal held that the value of free supplied material need not be included for claiming abatement. The Tribunal found the issue to be settled based on previous judgments and set aside the impugned order, allowing the appeal. This judgment clarifies the interpretation of Notification No.1/2006-ST regarding the inclusion of free supplied material in the gross value for claiming abatement in construction services, aligning with the decisions of previous cases and establishing a consistent legal position on the matter.
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