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TMI Blog2021 (2) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... s Corporation Limited (ONGC) for performing drilling operations on Oil Wells in the East and West Costs of India. For providing such service, the appellant chartered its vessel, namely Ultra Deepwater Drilling Unit "Platinum Explorer (Hull No. 3601)", owned by it on time - charter basis to ONGC. Such service provided by the appellant is confirming to the definition of taxable service under the category of "Mining of Mineral, Oil or Gas Service", defined under Section 65 (105) (zzzy) of the Finance Act, 1994. For providing such taxable service and other category of services, the appellant got itself registered with the Service Tax Department. In this case, the appellant had entered into an agreement dated 29.04.2009 with M/s. ONGC for carryi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he taxable value for the purpose of computation of service tax liability thereon. He further submitted that even the amended provisions to Section 67 ibid w.e.f.14.05.2015 would not be applicable to the case of appellant inasmuch as it had never charged the cost of fuel to the service receiver M/s ONGC for providing the taxable service. The learned Advocate has relied upon the judgment of Hon'ble Supreme Court in the case of Commissioner of Service Tax vs. Bhayana Builders (P) Ltd. - 2018 (10) G.S.T.L. 118 (S.C.) and Union of India vs. Intercontinental Consultants & Technocrats Pvt. Ltd. - 2018 (10) G.S.T.L. 401 (S.C.), to state that value of free supplies made under the contractual arrangement by the service receiver to the service provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 14.05.2015. The effect of amendment was that subclauses (ii) and (iii) were inserted in clause (a) in the definition of consideration contained in the explanation part appended to Section 67 ibid. The amended provisions include inter alia, any reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service, subject to the fulfilment of the prescribed conditions. In the present case, it is an admitted fact on record that the appellant had never charged any cost of fuel to M/s. ONGC over and above the amount claimed by it for providing the taxable service. Since, M/s. ONGC was not required to make payment of fuel to the appellant, its value cannot be added to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x, is to be included in computation of gross amount charged by the service provider, for valuation of taxable service. For valuation of taxable service, provision is made in Section 67 of the Act which enumerates that it would be 'the gross amount charged by the service provider for such service provided or to be provided by him'. Whether the value of materials/goods supplied free of cost by the service recipient to the service provider/assessee is to be included to arrive at the 'gross amount', or not is the poser. On this aspect, there is no difference in amended Section 67 from unamended Section 67 of the Act and the parties were at ad idem to this extent. 12. On a reading of the above definition, it is clear that both prior and after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the taxable service and is not a consideration for the service provided does not become part of the value which is taxable under Section 67. The cost of free supply goods provided by the service recipient to the service provider is neither an amount "charged" by the service provider nor can it be regarded as a consideration for the service provided by the service provider. In fact, it has no nexus whatsoever with the taxable services for which value is sought to be determined" 13. A plain meaning of the expression 'the gross amount charged by the service provider for such service provided or to be provided by him' would lead to the obvious conclusion that the value of goods/material that is provided by the service recipient free of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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