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TMI Blog2023 (2) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... the value of free supplies is set aside and appeal of M/S. DEEP CONSTRUCTION COMPANY to that extent is allowed. Availment of exemption notification No. 32/2007-ST dated 22.05.2007 - ground on which the benefit of the said notification is sought to be denied is that the appellant has availed the benefit of cenvat credit - HELD THAT:- The Commissioner has examined a few invoices and the ST-3 returns of the year 2009-10 and some worksheets with ST-3 returns to conclude that no input credit has been taken. The revenue has argued that conclusion reached on the basis of a few invoice cannot be sustained. The notifications are to be interpreted strictly and if M/S. DEEP CONSTRUCTION COMPANY has availed any cenvat credit of any inputs used while availing notification 32/2007-ST dated 22.05.2007 then the benefit of said notification cannot be granted. We find merit in the argument of the revenue - the impugned order is set aside and the matter is remanded to the original adjudicating authority for fresh adjudication after verifying the facts fully. Rejection of amount of adjustment mentioned in the SCN - HELD THAT:- The Commissioner in his order has held that the said amount is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amined by Hon ble Apex Court in the case of BHAYANA BUILDERS (P) LTD.- 2018 91 taxmann.com 109 (SC). 2.1 He further pointed out that in the appellant s own case, relief has been granted by tribunal for the demand of earlier period vide order no. A/10081/2014 dated 06.01.2014. Learned counsel further asserted that no free supply material was supplied during the period 2008-09 and 2009-10 and department has not produced any evidence of any supplies on free material. 2.2 Learned counsel pointed out that the second issue which has been raised by revenue in revenue s appeal relates to the benefit of Notification No. 32/2007-ST dated 22.05.2007. He pointed out that the Commissioner has rightly dropped the demand to Rs. 48,26,850/- demanded in the show cause notice. Learned Counsel claimed that they had not claimed any cenvat credit of inputs but only of input service which is permissible under Notification No.32/2007-ST dated 22.05.2007. 2.3 The third issue raised in the impugned order is if the appellant has adjusted the amount of Rs.1,43,72,143/- in the ST-3 returns on account of excess payment. He pointed out that the Commissioner has rightly observed that during the period A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant has obtained some free supplies from the service recipient while executing the Commercial, Industrial Construction Service for the service recipient. (ii) If the Commissioner has verified non availment of cenvat credit on input before allowing the benefit of Notification No. 32/2007-ST dated 22.05.2007. (iii) Whether the Commissioner has rightly rejected the amount of excess adjustment i.e. Rs.1,43,72,143/- mentioned in the show cause notice. (iv) Whether the Commissioner has rightly dropped the penalty imposed under Section 78 of the Finance Act, 1994. 4.1 We find that as far as first issue is concerned, the Hon ble Apex Court in the case of BHAYANA BUILDERS (P) LTD.- 2018 91 taxmann.com 109 (SC) has held that the value of free supplies cannot be included in the gross amount charged for the purpose of levy of service tax. In the said decision, following has been observed:- 17. Faced with the aforesaid situation, the argument of the learned counsel for the Revenue was that in case the assessees did not want to include the value of goods/materials supplied free of cost by the service recipient, they were not entitled to the benefit of notification dated September ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comes the element of taxable service . Thirdly, even when the explanation was added vide notification dated March 01, 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, Central Excise and Customs, Kerala v. M/s. Larsen Toubro Ltd. (2016) 1 SCC 170. This Court was concerned with exemption notifications which were issued in respect of taxable services covered by sub-clause (zzq) of clause (105) read with clause (25b) and sub-clause (zzzh) of clause (105) read with clause (30a) and (91a) of Section 65 of Chapter V of the Act. This Court in the aforesaid judgment in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly of the input services and not of the inputs. The Commissioner has examined a few invoices and the ST-3 returns of the year 2009-10 and some worksheets with ST-3 returns to conclude that no input credit has been taken. The revenue has argued that conclusion reached on the basis of a few invoice cannot be sustained. The notifications are to be interpreted strictly and if M/S. DEEP CONSTRUCTION COMPANY has availed any cenvat credit of any inputs used while availing notification 32/2007-ST dated 22.05.2007 then the benefit of said notification cannot be granted. We find merit in the argument of the revenue. In view of the above, the impugned order is set aside and the matter is remanded to the original adjudicating authority for fresh adjudication after verifying the facts fully. 4.3 The third issue relates to the appeal filed by the revenue against the rejection of amount of adjustment mentioned in the show cause notice amounting to Rs.1,43,72,143/-. The Commissioner in his order has held that the said amount is incorrect. It is seen that while coming to the said conclusion Annexure D to the show cause notice has not been fully examined. Annexure-D to the show cause notice gives ..... X X X X Extracts X X X X X X X X Extracts X X X X
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