TaxTMI 
TaxTMI 
2024 (10) TMI 55
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....nd 16.06.2005 to 30.09.2007. 2. The brief facts are Appellant is a partnership firm and entered into agreement for construction by using both material and labour. Considering the activity carried out by the appellant as falling under the category of service tax, appellant had obtained registration in 2007 and also paid considerable amounts by availing the benefit of abatement of 67% provided by Notification No. 18/2005-ST dated 07.06.2005 and 15/2004-ST dated 10.09.2004 and paid service tax on 33% of gross value and also filed ST-3 returns. However, alleging that the appellant is liable to pay service tax for the entire amount, show-cause notice was issued and also alleging suppression of facts considering the service as Commercial Const....
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....the facts of the present cases. It will also be noticed that no attempt to remove the non-service elements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of property in goods transferred in the execution of a works contract. ......................... 43. We need only state that in view of our finding that the said Finance Act lays down no charge or machinery to levy and assess service tax on indivisible composite works contracts, such argument must fail. This is also for the simple reason that there is no subterfuge in entering into composite works contracts containing elements both of transfer of property in goods as well ....
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...."for such service provided": Section 67 clearly indicates that the gross amount charged by the service provider has to be for the service provided. Therefore, it is not any amount charged which can become the basis of value on which service tax becomes payable but the amount charged has to be necessarily a consideration for the service provided which is taxable under the Act. By using the words "for such service provided" the Act has provided for a nexus between the amount charged and the service provided. Therefore, any amount charged which has no nexus with the taxable service and is not a consideration for the service provided does not become part of the value which is taxable under Section 67. The cost of free supply goods provided by t....
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....vice provider/assessee. Though, sub-section (4) of Section 67 states that the value shall be determined in such manner as may be prescribed, however, it is subject to the provisions of sub-sections (1), (2) and (3). Moreover, no such manner is prescribed which includes the value of free goods/material supplied by the service recipient for determination of the gross value. ........... 19. Matter can be looked into from another angle as well. In the case of Commissioner, Central Excise and Customs, Kerala v. M/s. Larsen & Toubro Ltd. - (2016) 1 SCC 170 = 2015 (39) S.T.R. 913 (S.C.). This Court was concerned with exemption notifications which were issued in respect of 'taxable services' covered by sub-clause (zzq) of clause (....
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....ll the conditions of the notification. We find that the requirement to qualify for the exemption is that materials are sold in the course of provision of service and the service provider maintains a record of the same. There is no dispute that the appellants are registered with the Karnataka VAT department for payment of VAT under the category of works contract for the impugned activities and that it paid VAT on 70% of the value of the works contract as per the provisions of KVAT Act. As clarified by the Deputy Secretary, Ministry of Finance, CBEC, exemption in respect of materials consumed/sold by the service provider to the service recipient providing taxable service is available if the service provider maintains records showing the mater....