9911796707
TMI Blog2025 (2) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... 0) TMI 1248 - DELHI HIGH COURT] and exclude the value of free materials used by the Assessee.
Both the adjudicating authority and the CESTAT were incorrect in holding that the SCN having been quashed, none of the other demands would also be liable to be adjudicated. Clearly, the decision of the Division Bench of this Court is not to the said effect. In fact, it permitted the Department to proceed further strictly in accordance with the judgment and exclude the value of free materials. All the other demands which are raised, accordingly, deserve to be adjudicated on facts and in accordance with law.
Appeal disposed off. X X X X Extracts X X X X X X X X Extracts X X X X ..... cember, 2016, which quashed the impugned SCN, following the decision in Era Infra Engineering Ltd. vs. Union of India [W.P.(C) 3048/2008] and Y.F.C Projects Ltd. vs. Union of India [W.P.(C) 1342/2008]. The Court therein observed as under: "The issue involved in this petition which seeks multiple reliefs is whether the show cause notice dated 11.02.2009 calling upon the petitioner why it should not be proceeded against for wrongly availing the benefit under Notification Nos. 15/2004-ST dated 10.09.2004, 18/2005-ST dated 7.6.2005 and 1/2006-ST dated 1.3.2006 and Works Contract (Composition Scheme for Payment of Service Tax), Rules, 2007 should not be drawn. The show cause notice recites that the petitioner was availing a self-assessment pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been provided free of cost or material which has been provided free of cost, would be included in the gross value for the purposes of service tax or not. The said issue was decided in favour of the assessees. The relevant portion of the judgment has been extracted below: 11) As already pointed out in the beginning, all these assessees are covered by Section 65 (25b) of the Act as they are rendering 'construction or industrial construction service', which is a taxable service as per the provisions of Section 65 (105) (zzq) of the Act. The entire dispute relates to the valuation that has to be arrived at in respect of taxable services rendered by the assessees. More precisely, the issue is as to whether the value of goods/materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese notifications, service tax is to be calculated on a value which is 33% of the gross amount that is charged from the service recipient. Obviously, no amount is charged (and it could not be) by the service provider in respect of goods or materials which are supplied by the service recipient. It also makes it clear that valuation of gross amount has a causal connection with the amount that is charged by the service provider as that becomes 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed and the proceedings were dropped. This order reads as under:- "6 The Department filed a Special Leave Petition SLP (C) No. 026491/2017. In the Hon'ble Supreme Court of India against the above Order of the Hon'ble High Court of Delhi. The Supreme Court of India disposed of the said SLP (C) on 19 02.2018 by dismissing the same. 7. I find that in view of the above Order of the Hon'ble Supreme Court of India, the matter has reached its finality and therefore, the proceedings initiated vide issuance of the impugned Show Cause Notice are liable to be dropped. 8. I therefore pass the following order:- ORDER The Show Cause Notice C No. DL/ST/AE/lnquiry/247/Gr. IV/08/4080 dated 12.02.2009 issued to M/s Alkarma, registered a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... none of the other issues were ever considered. Accordingly, the adjudicating authority committed an error in holding that the proceedings cannot continue against the Respondent. 10. On the other hand, ld. Counsel for the Respondent/Assessee submits that if the SCN is quashed, no proceedings can go on in respect of the SCN. 11. Heard. A perusal of the order dated 8th December, 2016, passed by the Coordinate Bench of this Court would show that the SCN was quashed, but the Department was permitted to proceed in accordance with the decision in Era Infra Engineering Ltd. vs. Union of India (Supra) and exclude the value of free materials used by the Assessee. 12. The liberty which was given to the Department in effect meant that the Court was ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
