2017 (12) TMI 234

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....vities undertaken by the appellant pursuant to the contract with IOCL should fall under the taxable category of "Commercial & Industrial Construction Service" for the period from 01.04.2005 to 31.03.2008. For non-payment of service tax such category of service, the Department sought to recover service tax amount of Rs. 48, 57,248/-. For the period 2008-09, the department proposed to recover service tax amount of Rs. 8, 59,948/- on the ground that the value of free supply material was not taken into consideration by the appellant for calculating the gross value of service. Further, an amount of Rs. 66,326/- was sought to be recovered from the appellant on the ground that the said amount was short paid by the appellant. The show cause notice ....

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....dvocate submitted that there was no short payment of service tax by the appellant and thus, the demand cannot be sustained. 3. On the other hand, the ld. DR appearing for the respondent reiterated the findings recorded in the impugned order. 4. Heard both sides and perused the records. 5. In this case, the service tax demand of Rs. 48,57,248/- was confirmed against the appellant on the ground that the services provided during the period 2005-06 to 31.03.2008 should be classifiable under Commercial and Industrial Contactor service. On perusal of the impugned order, we note that the ld. Adjudicating authority has recorded the submissions of the appellant that the appellant had executed works contract for IOCL, which included labour s....

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....tax demand of Rs. 8,85,746/- on the ground the appellant did not include the value of free supply material in the gross value and accordingly, short paid the service tax amount. In this context, we find that this Tribunal in the case of Yadav Fabricator & Contactor (supra), by relying on the co-ordinate bench decision in the case of Bhayana Builders Pvt. Ltd. and Sonal India has held that free supply items from the recipient of service to the provider of service is not to be considered for calculation of the gross amount for payment of service tax. Thus, free supply items will not be included for computation of the gross amount for the purpose of levy of service tax. However, since the original authority has not recorded any specific findin....