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TMI Blog2025 (3) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable value. Whether there was any liability of service tax on the appellants under the reverse charge mechanism? - HELD THAT:- It is true, as contended by Revenue, that even if one of the literal meanings of the expression used, namely free supplies used is considered as the legal meaning as well, construction service providers may not be handicapped as they may seek benefits under Notification No. 12/2003-ST. However the fact that the assessees have an alternative recourse to avoiding the rigor cannot be the criterion for interpreting the Explanation. This contention by Revenue proceeds on a fallacious comprehension of Notification No. 12/2003-ST. The benefits under this Notification are only in respect of the value of goods and materials sold by a service provider to the recipient of a taxable service. In the case of free supplies by the recipient there is no sale or transfer of title in the goods and materials in favour of the service provider, at any point of time. Therefore when free supplied goods and materials are incorporated into the construction would be no sale by the provider to the recipient either. Notification No. 12/2003-ST would therefore be inapplicable." - t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant to the service provider. It was also observed that amount of Rs.7,83,58,799/- is the cost of the diesel supplied by the appellant free to M/s. R.K. Carrier during the period April 2010 to June, 2012. During the said period, the appellant has also paid an amount of Rs.9,08,53,423/- to the service provider towards transportation charges. 2. The Department observed that in the transactions the appellant is the consigner and GMDC is the Consignee. Since the appellant is paying the freight to M/s. R.K. Carriers India Pvt. Ltd., in terms of Rule 2 (1) (d) (v) of Service Tax (Determination of Value) Rules 2006 the appellants are liable to pay service tax as recipient of service of transportation of goods by road. On being enquired the appellant had taken the plea of being eligible to exemption in terms of Notification No.34/2004 dated 03.12.2004. However, the department in view of Notification No. 35/2004 dated 03/12/2004 formed the opinion that the appellant being a registered company falls under category (b) of Notification No.35 and thus is liable to pay service tax on freight paid to the service provider, being a service recipient, as per the provisions of sub-clause (v) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve all, mere transportation of goods, other than by a GTA, is not chargeable to service tax. The taxable service referred to section 65 (105) of the Finance Act, 1994 attract the charge of service tax under section 66 of the Act. The present activity is otherwise not covered under GTA Services as no consignment Notes were issued. Ld. Counsel has relied upon following decisions: 1. Divya Yog Mandir Trust & others Vs. Commissioner of Central Excise, Commissionerate, Meerut-1 2022 (12) TMI 1147- CESTAT New Delhi 2. Narendra Road Lines P. Ltd. and Hari Mohan Garg Vs. Commissioner of Customs, Central Excise & Central GST, Agra 2022 (3) TMI 803- CESTAT Allahabad. 3. Bharat Swabhiman (Nyas) Vs. Commissioner Customs, Central Excise & Service Tax, Dehradun 2022 (1) TMI 1127- CESTAT New Delhi 4. Bhoramdeo Sahakari Shakhar Utpadam Karkhana Vs. Commissioner of Customs, Central Excise & Service Tax, Raipur 2019 (10) TMI 1416- CESTAT New Delhi 5. Rohan Motors Ltd. Vs. CCE, Meerut-1 2018 (7) TMI 29- CESTAT New Delhi 6. South Eastern Coal Fields Ltd. Vs. CCE, Raipur 2016 (8) TMI 677- CESTAT New Delhi 7. Finally ld. Counsel submitted that there is no suppression on part of the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of free diesel provided by them to the service provider, namely, M/s. R.K. Carriers. (2) Whether there was any liability of service tax on the appellants under reverse charge mechanism. (3) Whether appellants are eligible for the exemption benefit in terms of Notification No.34/2004- ST dated 03.12.2004 12. The Original Adjudicating Authority decided 3 of the issues against the appellant. However, the Commissioner (Appeals) has held that the value of free diesel provided by the appellant is not includible in the gross value/ taxable value. However, the findings under remaining two issues have been confirmed by reducing the quantum of demand to the extent of value of diesel. While making submissions before us the department has reflected grievance vis-à-vis the non-inclusion of the value of diesel in the gross value as well, however, no appeal has been filed by the department. The question No.1 thus stands already decided. Hon'ble Apex Court also in the case of Bhayana Builders reported as (2018) 3 SCC 782 has held as follows: "In the light of the clear Legislative text, the unambiguous provisions of sections 66 and 67 of the Act and in the light of the judgment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification was specified to come into force w.e.f. 01.07.2003. B. By Notification No. 15/2004-ST dated 10.09.2004, a further exemption was granted in respect of taxable service provided by a commercial concern to any person in relation to construction service. This Notification reads: "In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service provided by a commercial concern to any person, in relation to construction service, from so much of the service tax leviable thereon under section 66 of the said Act, as is in excess of the service tax calculated on a value which is equivalent to thirty-three per cent. of the gross amount charged from any person by such commercial concern for providing the said taxable service : Provided that this exemption shall not apply in such cases where - (i) the credit of duty paid on inputs or capital goods has been taken under the provisions of the Cenvat Credit Rules, 2004; or (ii) the commercial concern has availed the benefit under the notification of the Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that application of the noscitur principle could be gainfully employed to identify the legal meaning of the word used from several grammatical/ literal meanings of the said word, by employing the associational context. It is true, as contended by Revenue, that even if one of the literal meanings of the expression used, namely free supplies used is considered as the legal meaning as well, construction service providers may not be handicapped as they may seek benefits under Notification No. 12/2003-ST. In our view however the fact that the assessees have an alternative recourse to avoiding the rigor cannot be the criterion for interpreting the Explanation. This contention by Revenue proceeds on a fallacious comprehension of Notification No. 12/2003-ST. The benefits under this Notification are only in respect of the value of goods and materials sold by a service provider to the recipient of a taxable service. In the case of free supplies by the recipient there is no sale or transfer of title in the goods and materials in favour of the service provider, at any point of time. Therefore when free supplied goods and materials are incorporated into the construction would be no sale by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of Value per Trip Value of transportation as per schedule of rates 17 MT x 41.71= Rs. 709.07 Value of FOC Diesel in single Trip 17 MT x 36.464 =Rs. 619.89 Held to be not includable in taxable value. 18. The Commissioner (Appeals) has still held the amount to be above Rs.750/- while denying the exemption of the said Notification to the appellant. However we observe that there is no calculation given by the Commissioner (Appeals) to arrive at the quantum of Rs.24,30,564/- as duty confirmed of against the appellant alongwith same amount of penalty. 19. In the light of the above discussion, it is held that clause (ii) of Notification No. 34/2004 applies to the appellant. However the quantification is not apparent on record. Resultantly, we remand the matter back to the Original Adjudicating Authorities to quantify the amount of the differential duty, if any, to be recovered from the appellant, however, after arriving at a proper calculation showing as to whether the calculation arrived at by appellant is correct. If not, the reasons to be recorded. 20. The Commissioner (Appeals) is required to look into the calculation given by the appellant in their written s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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