Appeal dismissed for non-compliance with tax conditions; appellant must make pre-deposit before further appeal.

The appeal was dismissed due to the appellant's non-compliance with conditions set by the Commissioner (Appeals). The appellant, involved in construction services, received free goods and materials from the service recipient, leading to a service tax demand. The Tribunal upheld the inclusion of free supplies in the taxable value, directing the appellant to make a pre-deposit. The Commissioner (Appeals) was instructed to hear the appeal on merits after the pre-deposit. The case was resolved in accordance with the Tribunal's decision, requiring the appellant to comply with the pre-deposit and continue with the appeal process.

---

---

Issues:
1. Stay application for demands dismissal by Commissioner (Appeals) for non-compliance of conditions.
2. Exemption under Notification No. 01/2006 for construction services.
3. Tax liability on free goods and materials received.
4. Pre-deposit requirement for appeal hearing.
5. Tribunal's decision on inclusion of free goods in taxable value.
6. Direction for pre-deposit and further appeal proceedings.

Analysis:
The appellant filed an appeal with a stay application due to the dismissal of their appeal by the Commissioner (Appeals) for non-compliance with conditions mentioned in the stay order. The appellant, engaged in construction services, availed exemption under Notification No. 01/2006. During inspection, it was found that they received goods and materials free of cost from the service recipient, on which they claimed CENVAT credit. A show-cause notice was issued for payment of service tax on 33% of the gross bills, including the value of free supplies. Both lower authorities confirmed the demands. The Commissioner (Appeals) directed the appellant to pay the service tax demand along with interest as a pre-deposit for the final hearing of the appeal. The appellant failed to comply, leading to the dismissal of the appeal.

The appellant argued that the Commissioner's order lacked merit and cited cases where the Tribunal held that the construction of roads should not be included in the gross value of services. After hearing both sides, the Tribunal referred to the case of Jaihind Projects Ltd. vs. Commissioner of Service Tax, where it was held that goods supplied free by the service recipient should be included in the taxable value. Accordingly, the Tribunal directed the appellant to make a pre-deposit of Rs.2,00,000 within eight weeks. The Commissioner (Appeals) was instructed to hear the matter on merits and dispose of the appeal after providing a reasonable opportunity for the appellant to be heard.

In conclusion, the stay application and the appeal were disposed of with the direction for the pre-deposit and further appeal proceedings as per the Tribunal's decision in the case referenced.

---