Appeal granted: Free issue material value excluded from taxable value under Service Tax.

The appeal was allowed as the impugned order confirming the demand of Service Tax and imposing a penalty based on including the value of free issue material in the gross taxable value was set aside. The issue of interpreting Notification No.15/2004-ST regarding abatement of service tax for Commercial or Industrial Construction Service was settled in favor of the Appellant, who provided taxable service under this category. The value of goods and materials supplied free of cost by a service recipient should be excluded from the taxable value, as per the decision of the Larger Bench of the Tribunal in a previous case.

---

---

Issues Involved:
1. Interpretation of Notification No.15/2004-ST regarding abatement of service tax for Commercial or Industrial Construction Service.

Analysis:
The appeal in question was filed against an order passed by the Commissioner, C.Ex. & S.Tax, Vadodara-I, regarding the alleged wrong availment of benefit under Notification No.15/2004-ST by the Appellant, who provided taxable service under the category of Commercial or Industrial Construction Service. The issue revolved around the inclusion of the value of free issue material supplied by clients in the gross taxable value for availing the benefit of the said notification. Both parties agreed that this issue had been settled by the Larger Bench of the Tribunal in the case of Bhayana Builders (P) Ltd. Vs Commissioner of Service Tax, Delhi. The Larger Bench concluded that the value of goods and materials supplied free of cost by a service recipient should be excluded from the taxable value or the gross amount charged for the service provider. Therefore, the impugned order confirming the demand of Service Tax and imposing a penalty based on including the value of free issue material in the gross taxable value was set aside, and the appeal was allowed accordingly, with consequential relief as per law.

---