Cum-tax valuation required where service tax was not separately recovered, and the demand was remanded for fresh computation.

Service tax was held payable on the letting out of facilities, but because tax had not been separately recovered from customers, the consideration realised had to be treated as a cum-tax value. The Tribunal set aside the impugned order and remanded the matter to the original authority for fresh computation of the demand on that basis, with interest and penalty also left open for re-determination after granting the assessee an opportunity of hearing.

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Issues: Whether service tax was payable on the impugned letting out of facilities, and whether the demand required re-calculation by treating the consideration as cum-tax value.

Analysis: The Tribunal found that the appellant was liable to pay service tax for the relevant period. However, since service tax had not been recovered separately from customers, the amount realised had to be treated as cum-tax value and the tax liability re-determined on that basis. The impugned order was therefore set aside and the matter remanded to the original authority for fresh computation of demand, with interest and penalty also left open for re-determination after granting the appellant an opportunity of hearing.

Conclusion: Liability to service tax was upheld, but the demand was required to be recalculated on a cum-tax basis and the matter was remanded for fresh adjudication, which is partly in favour of the assessee.

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