TaxTMI 
TaxTMI 
2018 (11) TMI 225
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....nd chimney elevators and the main material required for the said construction work i.e. cement, bars, structural beam, chequered plates etc. required for the construction work to be supplied free of cost by M/s. NTPC and it is only the minor material work as that of nuts bolts fastener, electrodes, pipes etc. work to be provided by the appellant. It was also observed that M/s. NTPC have charged service tax after availing abatement of 67% as provided under Notification No.15/04-ST or Notification No. 1/2006-ST dated 01.03.2006 for arriving at the taxable value. But without complying the conditions as mentioned therein. Thus, the Department vide show cause notice No. 4353 dated 12.04.2010 alleging a short payment of Service Tax by the appellant has proposed the demand of Rs. 68,71,070/- for the period w.e.f. 01.10.2004 to 31.03.2006 alongwith interest at the appropriate rate and the proportionate penalty under Section 76, 77 & 78 of the Finance Act. The said demand was confirmed by the order under challenge. Resultantly, the present appeal. 2. We have heard Shri Rishabh Khandelwal, ld. CA for the appellant and Mr. Amresh Jain, ld. D.R. for the Department. 3. It is submitted on ....
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....ce. Explanation 1 of the pre-amended provision specified various components that are included in the value of a taxable service; 7.1 Such as the aggregate commission or brokerage charged by a broker on the sale/purchase of securities; the commission received by the travel agent from the airline; the reimbursement received by the authorized service station from the manufacturer for carrying out any service of any motor car, light motor vehicle or two wheeled motor vehicle manufactured by such manufacturer; etc. Explanation 1; also enumerated components which are to be excluded from the value of taxable service such as; 7.2 An initial deposit made by the subscriber while applying for telephone a connection; or pager or facsimile; the cost of unexposed photography film or unrecorded magnetic tape; the cost of parts or accessories or consumables such as lubricants and coolants, if any sold to the customer during the course of service or repair of motor cars; air fare or rail fare connected by an air/rail the travel agent in respect of service provided; the cost of parts or other materials, if any sold to the customer during the course of providing maintenance or repair service....
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....ld not constitute a non-monetary consideration. 11. Further, the Department in addition to alleging the free construction material as a non-monetary consideration for the appellant has also objected the benefit of the Notification No.15/2004-ST dated 10.09.2004 or Notification No. 1/2006 - ST dated 01.03.2006 as being not admissible to the appellants. We are of the opinion that this Notification exempts the taxable service provided by a commercial concern to any person in relation to construction service from so much of the service tax leviable thereon under Section 66 of the said Act as is in excess of the Service Tax calculated on a value which is equivalent to 33% of the gross-amount charged from any person by such commercial concern for providing the said taxable service. The Notifications No.15/2004-ST dated 10.09.2004 reads as follows:- "In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service provided by a commercial concern to any person, in relation to construction service, from so much of ....
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....fficult. Considering these facts, an abatement of 67% has been provided in case of composite contracts where the gross amount charged includes the value of material cost. (refer Notification No. 15/2004-S.T., dated 10-9-2004). This would, however, be optional subject to the condition that no credit of input goods, capital goods and no benefit (under Notification No. 12/2003-S.T.) of exemption towards cost of goods are availed." 13. This also clarifies that the value of free material provided by the service recipient has not to be included in the gross-value. In addition, the material used by the provider, by discharging his tax liability he is entitled to the abatement as mentioned in the Notifications herein. 14. The larger Bench of this Tribunal in Bayana Builders (supra) has already held that in Jai Hind Projects Ltd. vs. CST, Ahmadabad - 2010 (18).. STR 650.. the Tribunal had proceeded on flawed interpretation of the provision of Section 27 while holding as follows:- Basically, the objective of the explanation is to bring parity among all the service providers providing such services. Let us take a case of two pipe laying service providers. In one case, the pipes are p....
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.... the "value" of manufactured goods. Excise duty is not concerned with ownership or sale. The liability under the excise law is event-based and irrespective of whether the goods are sold or captively consumed. Under the excise law, the liability is there even when the manufacturer is not the owner of raw material or finished goods (as in the case of job workers). Excise duty, therefore, is independent of ownership (see: Ujagar Prints & Ors. v. Union of India & Ors. also reported in [(1989) 3 SCC 488]. Therefore, for sales-tax purposes, what has to be taken into account is the consideration for transfer of property in goods from the seller to the buyer. For this purpose, tax is to be levied on the agreed consideration for transfer of property in the goods and in such a case cost of manufacture is irrelevant. As compared to the sales-tax law, the scheme of levy of excise duty is totally different. For excise duty purposes, transfer of property in goods or ownership is irrelevant. As stated, excise duty is a duty on manufacture. The provisions relating to measure (Section 4 of 1944 Act read with Excise Valuation Rules, 2000) aim at taking into consideration all items of costs of manufa....