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TMI Blog2019 (1) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... cost by the service recipient and used for providing taxable service of construction of Commercial or Industrial Construction is not to be included “gross amount charged” for the purpose of arriving tax liability - the impugned orders cannot be sustainable and requires to be set aside - appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... struction is not to be included "gross amount charged" for the purpose of arriving tax liability. 3. On the other hand, Ld. AR, Shri B. Balamurugan, AC, supports the impugned orders. 4. On going through the facts of the case, we find that the Ld. Advocate is correct in her assertion that the issue under dispute has been finally laid to rest by the Hon'ble Supreme Court judgment in Bhayana Builders (P) Ltd. The relevant portions of the said judgment are reproduced for ready reference:- "16. In fact, the definition of "gross amount charged" given in Explanation (c) to Section 67 only provides for the modes of the payment or book adjustments by which the consideration can be discharged by the service recipient to the service provider. It do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s supply of goods, the said notifications were issued for the convenience of the assessees. According to the Revenue, the purpose was to bifurcate the component of goods and services into 67%: 33% and to provide a ready formula for payment of service tax on 33% of the gross amount. It was submitted that this percentage of 33% attributing to service element was prescribed keeping in view that in the entire construction project, roughly 67% comprises the cost of material and 33% is the value of services. However, this figure of 67% was arrived at keeping in mind the totality of goods and materials that are used in a construction project. Therefore, it was incumbent upon the assessees to include the value of goods/material supplied free of cos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble service'. Thirdly, even when the explanation was added vide notification dated March 1, 2005, it only explained that the gross amount charged shall include the value of goods and materials supplied or provided or used by the provider of construction service. Thus, though it took care of the value of goods and materials supplied by the service provider/assessee by including value of such goods and materials for the purpose of arriving at gross amount charged, it did not deal with any eventuality whereby value of goods and material supplied or provided by the service recipient were also to be included in arriving at gross amount 'gross amount charged'. 19. Matter can be looked into from another angle as well. In the case of Commissioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 93, the Central Government is empowered to grant exemption from the levy of service tax either wholly or partially, which is leviable on any 'taxable service' defined in any of sub-clauses of clause (105) of Section 65. Thus, exemption under Section 93 can only be granted in respect of those activities which the Parliament is competent to levy service tax and covered by sub-clause (zzq) of clause (105) and sub-clause (zzzh) of clause (105) of Section 65 of Chapter V of the Act under which such notifications were issued. 21. For the aforesaid reasons, we find ourselves in agreement with the view taken by the Full Bench of CESTAT in the impugned judgment dated September 6, 2013 and dismiss these appeals of the Revenue." 3. Following ..... X X X X Extracts X X X X X X X X Extracts X X X X
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