2017 (1) TMI 1549 - AT - Service Tax

Assessee's Appeal Granted, Penalties Set Aside under Section 80

The Tribunal allowed the assessee's appeal, excluding free issue of diesel for service tax levy, following a precedent. The decision to set aside ... Valuation of taxable service - inclusion of free supplies in taxable value - invocation of Section 80 of the Finance Act, 1994 - followance of coordinate-bench precedentInclusion of free supplies in taxable value - valuation of taxable service - followance of coordinate-bench precedent - Free supply of diesel for rendering site formation service shall not be included in the value of service for determination of service tax liability. - HELD THAT: - The Tribunal applied its earlier coordinate-bench decision in Final Order No. 52549/2016 dated 06.07.2016 in favour of the appellant, which held that free supply of diesel shall not form part of the value of the service for levy of service tax. On identical facts the Tribunal respectfully followed that precedent and concluded that the assessee's free issue of diesel should be excluded from the taxable value, resulting in allowance of the assessee's appeal.Assessee's appeal allowed by excluding free supply of diesel from taxable value.Invocation of Section 80 of the Finance Act, 1994 - Validity of setting aside penalties by invoking Section 80 of the Finance Act, 1994. - HELD THAT: - The Tribunal found that the Commissioner (Appeals) had correctly invoked Section 80 of the Finance Act, 1994 to set aside penalties imposed on the respondent. There was no error in that exercise of power as recorded in the impugned order, and the Tribunal sustained the setting aside of penalties.Penalties set aside by invoking Section 80 sustained; Revenue's appeal on penalties dismissed.Final Conclusion: The Tribunal allowed the assessee's appeal by excluding free-supplied diesel from the taxable value (following the coordinate-bench precedent) and upheld the setting aside of penalties under Section 80 of the Finance Act, 1994; the Revenue's appeal is dismissed. Issues Involved:1. Appeal for early hearing of appeal2. Dropping of penalties in the impugned order3. Exclusion of free issue of diesel for levy of service tax4. Invocation of Section 80 of the Finance Act, 19945. Final decision on appeals filed by both Revenue and assesseeAnalysis:1. The applicant filed a Misc. Application for early hearing of the appeal. The Tribunal noted that the Revenue had also filed an appeal against the impugned order on similar facts. Consequently, both appeals were taken up for final hearing by allowing the Misc. Application.2. Both the Revenue and the assessee had filed appeals against the impugned order dated 31.05.2012. The Revenue contended that the dropping of penalties was not in line with the Service Tax Statute. On the other hand, the assessee's appeal was based on the argument that the free issue of diesel for rendering on-site formation service should be excluded for determining the value for service tax levy.3. After hearing both parties and examining the records, the Tribunal referred to a previous decision in the case of the appellant. In that decision, it was held that the free supply of diesel should not be included in the value of service for determining service tax liability. Consequently, the appeal of the assessee was allowed, following the precedent set by the Coordinate Bench decision.4. The Tribunal acknowledged that the Ld. Commissioner (Appeals) had appropriately applied Section 80 of the Finance Act, 1994, to set aside the penalties against the Respondent. This decision was upheld, leading to the setting aside of the impugned order and allowing the appeal in favor of the appellant. The appeal filed by the Revenue was dismissed.5. In conclusion, the Tribunal's final decision was to allow the appeal of the assessee based on the exclusion of free diesel supply for service tax valuation. It also upheld the decision to set aside penalties against the Respondent under Section 80 of the Finance Act, 1994. The appeal filed by the Revenue was dismissed, bringing a resolution to the issues raised by both parties in the appeals before the Tribunal.This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Tribunal's decision on each matter, maintaining the legal terminology and significant details from the original text.