Service tax valuation excludes notional interest on refundable security deposits where the statute does not permit deemed additions.

Service tax valuation under section 67 of the Finance Act, 1994 is limited to the actual consideration received for the service, so notional interest on a refundable security deposit taken for locker services could not be added to the taxable value. The deposit served a collateral purpose and was not consideration for the service, and in the absence of express statutory authority to tax deemed interest, the demand was unsustainable. The Tribunal also noted that the issue was covered by its earlier decision in the same appellant's case.

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Issues: (i) Whether service tax could be levied on notional interest computed on a refundable security deposit collected for locker services.

Analysis: The taxable value under section 67 of the Finance Act, 1994 is confined to the consideration actually received for the service. The security deposit was taken for a collateral purpose and not as consideration for the service. In the absence of any express statutory provision permitting addition of notional interest to the value of the taxable service, such deemed interest cannot be brought to tax. The issue stood covered by the Tribunal's earlier decision in the appellant's own case.

Conclusion: Service tax could not be levied on the notional interest calculated on the refundable security deposit, and the demand was unsustainable.

Ratio Decidendi: For service tax valuation, only the actual consideration for the service is taxable, and notional interest on a refundable security deposit cannot be added to the taxable value unless the statute expressly so provides.

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