2018 (8) TMI 323

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 2. Heard both sides and perused the records. 3. The brief facts of the case are that M/s APGENCO had awarded the contract of construction of thermal power station to M/s BGR Energy Systems Limited (BGR for short) who, in turn, subcontracted part of the work involving the construction of civil and architectural works of the buildings and foundations to the appellant. One of the conditions of this contract is that M/s BGR will supply the cement and steel required for the execution of aforesaid construction. Only quantity of cement and steel required for the execution of the contract has been issued and surplus, if any, left out were taken back by M/s BGR. A mobilization advance of 10% of the amount was given by M/s BGR to the appellant. The .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... whether the value of cement and steel supplied free of cost by the service receiver had to be included in the assessable value in order to be ineligible for abatement under Notification No. 01/2006 -ST dated 01.03.2006 as amended. b) whether the service tax on the mobilization advance is liable to be paid at the time of receipt or at the time of adjustment towards amount payable for service. It is his submission that to avail the benefit of abatement under Notification No. 01/2006- ST, the value of free supplied materials need not be included in the gross amount. This issue is no more res integra and has been settled by the Hon'ble Supreme Court in the case of M/s Bhayana Builders Pvt. Ltd., [2018 (10) GSTL 118 (S.C.)]. As far as the mob .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... le Apex Court. As far as the second issue of the demand on mobilization advance paid is concerned, we find that the relevant period of demand in this show cause notice is 2007-2008 to 2011-2012 and the last mobilization advance was paid on 01.12.2010, i.e., before the point of Taxation Rules, 2011 came into force and hence the appellant was not liable to pay service tax when they received these advances. It has been held in the case of Thermax Instrumentation Ltd., (supra) that the advances received by the appellants are not receipts but are in the form of loan given to them and not a payment against invoice and service tax cannot be levied on them. It is the contention of the Departmental Representative that if it is a free loan given to t .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X