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TMI Blog2017 (11) TMI 1576X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Service Tax, fine and penalty for stay of operation of impugned order as held by Member (Judicial) - matter referred to Third Member. - Application No. ST/Stay/52469/2014 Appeal No. ST/51978/2014 - Interim Order No. 25/2017 - Dated:- 13-10-2017 - Mr. Ashok Jindal, Member (Judicial) and Mr. Devender Singh, Member (Judicial) Shri Manish Gaur, Advocate for the Applicant(s) Shri Harvinder Singh, A.R. for the Respondent(s) ORDER The applicant is providing Maintenance, Management or Repair Services to M/s. Bharti Airtell Limited and charging certain amounts from them for these services. M/s. Bharti Airtell Limited also providing office space to the applicant free of cost and in some cases, M/s. Bharti Airtell Limited i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Id. Counsel. For the amounts reimbursed to M/s. Bharti Airtell for providing 1200 seats against some amount and staff welfare charges, he submits that the same is includable in the taxable value of service tax. 4. Heard the parties and considered the submissions. For free supply of seats and staff welfare provided by M/s. Bharti Airtell, the applicant has made out a prima-facie case in the light of decision of the Larger Bench of this Tribunal in the case of Bhayana Builders Pvt. Limited (supra) . Therefore, for that part of amount of service tax, waiver of pre-deposit of amount of service tax, interest and penalties is granted. 5. With regard to the amount reimbursed to M/S. Bharti Airtell by the applicant, M/s. Bharti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rous services like office space, office infrastructure, like hardware, light, power, air-conditioning, office supplies, telephone services and office support services like security and administrative supplies to be used by the noticee, free of coste The Revenue felt that these free of cost services were consideration received in kind and the cost of these services should form part of the gross taxable value towards payment of service tax. Two show cause notices were issued and the same were adjudicated, resulting in confirmation of demand of ₹ 2,03,57,468/-and ₹ 1,56,83,192/- along with interest and penalties under Sections 76, 77 and 78 of the Finance Act. Aggrieved from the same, the appellant have filed this appeal alongwith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Finance Act, this has to be included in the value of taxable services. 4. Heard the parties and perused the records. 5. I find that it is an admitted fact that prior to MSA, M/s. Bharati Airtel Ltd. were themselves undertaking these activities in their own office space and office infrastructure and the cost of the same was being made part of the taxable value. After assigning these services to the appellant, the cost of such office space and hardware etc. has not been included in the taxable value assessed by the appellant. 6. I find that comparison of a plumber or repair engineer with the facts of the present case is not proper as use of facilities by such worker is indeed just incidental. Whereas in the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to the terms and conditions as detailed in Appendix 3A to this Addendum 2. 7. The above arrangement suggests that such facilities/infrastructure have a well-defined cost per seat per month towards office and infrastructure and office welfare which M/s Airtel Ltd. has already worked out and as per addendum, M/s. Airtel Ltd. will charge the appellant for office/infrastructure for 1200 seats from 01.04.2010. The appellant's contention is that consideration charged by them was composite, inclusive of consideration for bundle of services provided by them. The fact that addendum provides costing of some seats to be paid by the recipient of the services and other seats completely free of cost, and such services are required for perfo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truction Vs. Commissioner (supra) is based on the ratio of Bhayana Builders (P) Limited which is already been distinguished. 10. In the case of Inox Air Products Vs, Commissioner (supra) , the Hon'ble Bombay High Court had concluded that electricity supplied free of cost was meant to be consumed in manufacture of oxygen and oxygen so manufactured was used in the manufacture of final products, which was cleared on payment of duty. Hence it could not be considered in determining the value of taxable service. In the present case, admittedly, the free of cost facilities infrastructure provided to the appellant is for rendering the taxable service and there is clear nexus between the two. Hence, Prima-facie, the cost of facilities infr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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