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TMI Blog2018 (4) TMI 909X X X X Extracts X X X X X X X X Extracts X X X X ..... ce back to M/s Airtel. All these aspects require much closer scrutiny at the time of final disposal of appeal - the appeal may be admitted without insisting on pre-deposit for a final decision. In view of the majority decision the appeal can be admitted without insisting on pre-deposit. Accordingly, application for waiver of pre-deposit is allowed till disposal of the appeal. - Application No. ST/Stay/52469/2014 Appeal No. ST/51978/2014 - Stay Order No. 60126/2018 - Dated:- 26-3-2018 - 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 is charging infrastructure charges/ staff welfare charge from the applicant. Revenue is of the view that the free services provided by M/s. Bharti Airtell and the services for which M/s. Bharti Airtell ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osit of entire amount of service tax, interest and penalties is granted to the applicant during the pendency of appeal. (Order dictated and pronounced in the court) PER: DEVENDER SINGH The brief facts of the case are that the appellant are registered with the Service Tax Commissionerate for maintenance and repairs service. On an audit by the Department, it was found that the appellant were providing these services of telecommunication network to M/s.Bharati Airtel Ltd. with whom they had entered into a managed service agreement dated 30.4.2009 (MSA) and addendum dated 5.8.2010. As per agreement, the noticee was entrusted the work of management and repairs of fixed landline business of M/s.Bharati Airtel Limited and expansion of new lines across India. Prior to the agreement, this work was being done by M/s.Bharati Airtel Limited themselves. As per the condition of the agreement, the majority of the employees of M/s.Bharati Airte! Ltd who were earlier working in these formaitons had accepted the employment offered by the appellant. It was found by the audit that service recipient had provided to the appellant numerous services like office space, office infrastructur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i 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, the scale, scope, dimension of use and part payment of facilities, which were used by the M/s. Bharati Airtel Ltd. themselves hitherto, and have been allowed to be used when the work was outsourced by the appellant show that it is not incidental. It is seen that the cost is well-defined in the addendum dated 5.8.2010, wherein Article 2 reads as below: 4. Article 2, (Office Space and Allied Infrastructure ) of the Addendum 1 shall be amended to read as: a) Aitel has agreed to provide Office Space and Allied Infrastructure for 1938 seats in its leased/owned offices to the managed service provider (MSP). b) Airtel will provide 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, the facts of the case of the cited case are entirely different from the present case and hence the ratio therein is not applicable. 9. The case of Bhayana Builders (P) Limited (supra) cited by the appellant pertained to free supplies of construction material wherein the Tribunal has held that free supplies, incorporated into construction (cement, or steel for instance), even on an extravagant inference, would not constitute a non-monetary consideration remitted by the service recipient to the service provider for providing a service, particularly, since no part of the goods and materials so supplied accrues to or is retained by the service provider. The case law of Gurmehar Construction 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eats for the staff of the appellant. This is a requirement for providing the management, maintenance service. While valuing the tax liability of such service the appellant considered only the amount paid on such seats provided by M/s Airtel Limited. The arrangement between the two stipulated that the appellant need to pay for only 1200 seats from 01/04/2010 onwards. There is no consideration stipulated for the remaining seats provided by M/s Airtel Limited. The Revenue entertained a view that the remaining seats are also to be considered as a requirement for providing taxable service by the appellant and being a non-monetary consideration arrived at the value attributable to such not charged seats. The value was accordingly modified, differential tax was demanded. 3. When the appeal came up before the Division Bench to consider the requirement of pre-deposit, Member (Judicial) held that the appellant have a strong prima facie case and accordingly allowed full waiver of pre-deposit. Member (Technical) held that the appellant shall pay Rs. one crore as a pre-deposit. 4. With the above background, I heard learned Counsel for the appellant and the learned for the Revenue. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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