TaxTMI 
TaxTMI 
2024 (11) TMI 401
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....re engaged in providing various services viz. Mining Service, Site Formation and Clearance Service, Maintenance or Repair Service, Works Contract Service, Transportation Service etc to M/s. Utkal Alumina International Ltd (hereinafter referred as UAIL or the service recipient) Rayagada, Odisha. The appellant carried out taxable as well as exempt works such as Mining works, works in relation to Ash Pond, Red Mud Storage Pond, construction of boundary wall for Red Mud Storage Pond, construction of check dam, construction of road bridge, Repair and maintenance of road, construction of embankment on the railway siding, transport of Bauxite ore from Mines top to the Plant/Refinery etc. In connection with carrying out the mining activity of Bauxite Ore, the appellant entered into a contract dated 14.05.2012 with the service recipient. After about 3 years of service activity, the appellant closed their business operations from November, 2015 onwards, consequent to transfer of Baphilimali Mines Development Work Agreement dated 14.05.2012, entered with the service recipient, to M/s. Mythri Infra, Visakhapatnam, in terms of an Assignment and Novation Agreement dated 29.10.2015. By virtue of ....
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.... Credit Rules, 2004 read with Section 73 of the Finance Act, 1994. 3.51 crores 4 CENVAT Credit demand on capital goods under Rule 14 of CENVAT Credit Rules, 2004 read with Section 73 of the Finance Act, 1994. 3.22 crores 5 CENVAT credit demand on inputs and input services under Rule 14 of CENVAT Credit Rules, 2004 read with Section 73 of the Finance Act, 1994. 69.07 lakhs Total 47.19 crores 2.3. The amounts paid during the course of investigation i.e., Rs. 1,86,41,324/- along with interest of Rs. 29,59,357/- and Rs. 3,25,57,169/- along with interest of Rs. 56,06,076/- were appropriated towards the duty demands. 2.4. The ld. adjudicating authority has imposed the following penalties against the appellants: - (i) M/s. K V Mohana Rao and Company Pvt. Ltd S.No. Section Penalty imposed i Penalty in terms of Section 78 of the Finance Act, 1994. Rs. 47.19 crores ii Penalty under Section 77 ibid Rs. 10,000/- iii Late Fees under Section 70 ibid Rs. 16,800/- (ii) An amount of Rs. 3.51 crores have been imposed as penalty under Section 78 ibid on M/s. Mythri Infra, the assignee of Assignment and Novation Agreement dated 29.10.2015. (iii) Personal penalty of....
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....nt heads, such as, Bauxite Ore Transportation, reimbursable expenditure on diesel, double demands on advances, clearly exempt services like., road works, railway works, service tax demand on material supply per se etc. 3.3. During the course of the Hearing and in their written submissions, the appellant made a detailed presentation of their stand by way of facts and figures drawn from their financial records to sustain their view point. They contended that the Revenue had inflated the demand to abnormal proportions. In this regard, they contended that the Revenue reopened clearly established issues like tax liability on free supplies, reimbursable expenditure, railway works, roads which are all squarely covered by settled case laws. In respect of double demands, it is their contention that ignoring the trade practice and the clear documentation of the appellant, the Revenue demanded tax twice on the advances amounting to Rs. 10.68 crores. The first demand is towards - once when the advances were received and for a second time on the total gross receipts of the final bills / invoices, without giving consideration to the factual position that such advances were adjusted from the sai....
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....aside the demand on free supply of materials with regard to M/s. Mythri Infra in respect of the same Mining Contract assigned to them in terms of an Assignment and Novation Agreement dated 29.10.2015; the said appeal covers all the issues as of the present appeal, in relation to free supply material. Accordingly, they submitted that the demand of service tax confirmed in the impugned order on this count is not sustainable. 5. Service tax demand: Regarding the demand of service tax of Rs. 33.84 crores, the appellant submits that this is a combined demand covering service tax on various categories. The break-up of this demand and the submission of the appellant on these demands confirmed in the impugned order are as below: 5.1. Bauxite Ore Transportation: Demand Rs. 9.03 crores: This demand has been confirmed in respect of the Goods Transport Agency (GTA) service rendered by the appellant on reverse charge basis. The appellant submits that the demand of service tax on this category from them is not sustainable as they are not the 'persons' liable to pay tax on this activity. They contend that in respect of GTA service, service tax under reverse charge mechanism is liable to be cha....
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....hority (para 5.35(i) of the O- I-O in Page No. 247 of Vol. I) to conclude that the appellant have collected service tax on this activity is not factually correct since the service recipient did not honour the said invoice in toto. The corresponding Payment Advice No.51407542 dated 24.10.2014 confirms that only service consideration i.e. Rs. 1,60,67,790/- is paid but not the service component (page no. 156 of Vol. III). 5.4. It is submitted that the demand confirmed on the basis of a single invoice without verification of all the invoices is not legally sustainable (even in respect of this single invoice, the Department could not prove that the appellant has actually collected the service tax, except making a mere allegation). In this regard, the appellant intends to rely on the following decision of the Hon'ble CESTAT Kolkata: (i) M/s. R.S. Ispat Pvt. Ltd. Versus Commissioner of Central Excise, Kolkata-IV and Shri Radhe Shyam Agarwal, Director M/s. R.S. Ispat Pvt. Ltd. Versus Commissioner of Central Excise, Kolkata-IV, 2024 (9) TMI 176 - CESTAT Kolkata. 5.5. It is also the case of the appellant that the impugned activity, being chargeable to service tax under reverse charge mec....
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....n from the said payment advice. The appellant adds that they paid this service tax to the Revenue in the normal course and submitted proof thereof - tax payment challan. 6.2. Thus, the appellant submits that there is no service tax liable to be paid on these expenditures for diesel reimbursed by the service recipient upto 14.05.2015. Accordingly, the demand of service tax of Rs. 4.78 crores confirmed in the impugned order on this count is not sustainable. 7. Demand on advances: Rs. 10.68 crores: 7.1. The appellant submits that this is a double demand, wherein initially, when the advances were received, demands were raised on such advances, subsequently, service tax is demanded for the second time when they raised the final bill on the gross value- which value is inclusive of the said advance component. The appellant submits that when they raise the final bill, the advance component is adjusted and the remaining amount only was paid to them; this being the factual position, charging service tax on the advances first when the advances were received and demanding service tax on the entire gross value of the final bills (which gross values are inclusive of such advances) for the sec....
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.... it is alleged that the appellant collected service tax on this activity. In this regard, the appellant submits that even though they billed service tax in a few cases, the service recipient did not pay service tax even on a single instance; the Revenue has not brought in any evidence to substantiate the allegation that the appellant has actually collected the service tax. As the activity of construction of road is exempted from payment of service tax as per Notification 25/2012- ST, the appellant submits that the demand confirmed on this count is not sustainable. 9.3. In support of their contention that construction of road used by general public is not subject to service tax, the appellant relied on the following decisions. Commr. of Cus. & C. Ex., Raipur vs. National Project Construction Corpn. Ltd. [2020 (42) G.S.T.L. 75 (Tri. - Del.)] Rajendra Singh Bhamboo vs. Commr. of C. Ex. & S.T., JAIPUR-I [2019 (22) G.S.T.L. 278 (Tri. - Del.)] 9.4. Accordingly, the appellant submits that the demand of Rs.1.49 crore on this count is not sustainable. 10. Confirmation of demand of Rs. 1.15 crores on Commission: 10.1. The appellant submits that they have sub- contracted some of the w....
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....Del.)] iv. Rajendra Singh Bhamboo Vs. Commr. of CEx& ST, Jaipur-I [2019 (22) G.S.T.L. 278 (Tri. - Del.)] 11.3. Accordingly, the appellant submits that the demand of Rs. 49,37,297/- confirmed in the impugned order is not sustainable. 12. Erection, Commissioning and Testing - Double Demand - Rs. 92.46 lakhs: 12.1. In this regard, the appellant makes the submission that the demand raised in the instant notice on this issue against S. No. 68 of Annexure - A3 and S. No. 75 of Annexure - A4, has already been covered in the Show Cause Notice dated 17.10.2016 (indicated at last two entries of Annexure - 9 to the said Show Cause Notice) and hence it is a double demand. According to the appellant, this fact has been accepted in para 108 of the present notice that income relating to construction of Red Mud Pond, covered by the work order no. 11/10639/01/1757 is excluded in these proceedings on the ground that the same is covered by Show Cause Notice dated 17.10.2016. It is submitted that the Ld. adjudicating authority did not give any findings on the submissions made by them on this demand in the entire Order-in-Original. Accordingly, the appellant submits that the double demand of Rs. 9....
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....ted 17.10.2016 and dealt at para 12 supra) put together match to the value of the work order cited above. 14.2. Accordingly, the appellant submits that the double demand of Rs.28,38,310/- confirmed in the impugned order is liable to be set aside. 15. Confirmation of Demand of Rs. 78.96 lakhs: 15.1. It is their submission that this is a double demand on the advances received and the tax thereon was paid earlier; this demand relates to S. Nos. 12, 16 & 17 of Annexure - A3. The total demand of the 3 invoices shown as liability is Rs. 1,50,74,782/- (36,78,374 + 68,19,229 + 45,77,179); In respect of the above 3 transactions, the appellant obtained advances amounting to Rs. 7.47 crores (2cr + 4.47cr + 1cr) during the year 2011-12; the appellant paid service tax amounting to Rs. 46,85,866/- under challan no. 127 dated 30.07.2012 and Rs. 22,89,746/- under CENVAT Credit on the said amounts. The appellant submits the related ledger accounts and challan evidencing payment of service tax; these advances are adjusted in the present bills. It is their submission that while this is the factual position, the investigating agency indicated tax liability on the total gross amount (which is inclus....
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....Contract Service; the Notice dated 17.10.2016 also held the activity to be Works Contract Service. Accordingly, the appellant paid tax on 40% of the value after availing abatement available under Works Contract Service, as against the claim of the Revenue i.e., quantification of the demand on 100% of the value in the present proceedings, which is not correct; While the Revenue calculated the tax on the total value, the appellant computed tax on 40% of the value, applicable to Works Contract Service. It is submitted that the appellant had collected and correctly paid service tax as per the provisions relating to Works Contract Service on these transactions. In proof thereof, the related payment advices issued by the service recipient were provided by the appellant negating the claim of the Revenue. Accordingly, the appellant submits that the demand confirmed on this count is not sustainable. 17.2. Accordingly, the appellant prayed for setting aside the demand of service tax of Rs.22.87 lakhs confirmed on this count. 18. Demand of Rs. 1.25crores for the year 2012-13. 18.1. This demand relates to 3 transactions. Out of the 3 transactions, S. No.1 relates to work in connection with ....
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....dicating Authority was that the Investigating Agency computed the demand arbitrarily, the Ld. Adjudicating Authority, without addressing the submissions and evidence, also confirmed the demand of Rs. 33.84 crores arbitrarily; however, they have contended that the demand in respect of this differential amount fails on limitation front; the appellant submits that the present notice was issued on the heels of the earlier notice dated 17.10.2016 covering the same period; the said notice has clearly gone on record that the assessee was providing exempt/non-taxable services like bauxite ore transportation, reimbursable expenditure, road works etc., and yet did not question the said clearances; the three successive audits conducted during the relevant period also did not question the said transactions; in fact, the audit memo dated 06.05.2016 for year 2014-15 has asked for reversal of proportionate CENVAT Credit on the ground that the appellant have provided taxable as well as exempt/non-taxable clearances. Thus, it is submitted that the demand raised by invoking extended period of limitation is not legal and proper. 20. Confiscation of the old and used machinery valued Rs. 17.3 crores, ....
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.... iv. Commissioner of C.Ex., Tiruchirappalli Vs. CESTAT, CHENNAI [2015 (323) E.L.T. 290 (Mad.)] v. Commissioner of C.Ex., Cus. & S.T., Raipur Vs. Bhilai Steel Plant [2018 (12) G.S.T.L. 28 (Chhattisgarh)] 20.3. They also submit that in the case of J. K Spinning and Weaving Mills Ltd and Another Vs. Union of India and Others [1987 (32) E.L.T. 234 (S.C.)], relied on in the above decision of Hon'ble Chhattisgarh High Court, the Hon'ble Supreme Court held that "removal" means physical movement of the goods and it contemplates shifting of a thing from one place to another; In other words, it contemplates physical movement of goods from one place to another; in the present case, there was no physical movement of the capital goods from the place of their location to another place. 20.4. The appellant also submitted that invocation of Rules 8(4), 24 & 25(1)(a) to (d) of the Central Excise Rules, 2002 is not warranted in this case as the same is applicable to goods removed from a factory or warehouse; the appellant in the present case is a service tax registrant and is neither a factory nor a warehouse. Thus, it is contended that explanation to Rule 8 is not attracted; Rule 24 invoked on....
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....he machinery, imposition of redemption fine of Rs. 50 lakhs, demand of Rs. 3.51 crores from the appellant in addition to imposition of mandatory penalty of Rs. 3.51 crores on them and imposition of mandatory penalty of Rs. 3.51 crores on M/s. Mythri Infra are all liable to be set aside. Thus, the appellant prayed for return of the amount of Rs. 3,25,57,169/- towards the demand along with interest thereon amounting to Rs. 56,06,076/- paid in cash vide challan dated 22.12.2016, treating the same as a deposit made during the investigation. 21. Confirmation of CENVAT Credit demand of Rs. 3.22 crores on capital goods: 21.1. The appellant submits that part of this demand of Rs. 3.22 crores, i.e. Rs. 1.36 crores, is not legal and proper, as it is a double demand already covered and confirmed within the demand of Rs. 3.51 crores as stated above; the demand is in relation to the same machinery covered by the same documents which is already confirmed in the said demand of Rs. 3.51 crores. 21.2. The appellant submits that the details of the credit relating to the demand of Rs. 3.51 crores are provided in Annexure - B3 to the notice and the details of credit relating to the demand of Rs. 3.....
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....2014- 15 & 2015-16 and the demand details are provided in the Annexures - C-1, C-2 & C-3 respectively as Rs. 43,66,149/-, Rs. 12,15,906/- & Rs. 13,25,621/- for the respective years. The appellant contested this demand on merit as well as on the ground of limitation, in view of one more Notice dated 17.10.2016 issued to the appellant by invoking extended period and the successive audits conducted by the Revenue during the relevant period. The appellant submits that CENVAT Credit availment of the appellant-company was examined by the audit wing of the Revenue and it chose not to raise any other demand on this front, except the demand of Rs. 11,19,214/- wherein the appellant was required to reverse the said credit on proportionate basis on the ground that they utilized CENVAT Credit of Rs. 19,58,625/- on inputs and input services, used both in taxable and non-taxable services; Since it satisfied itself as to the correct availment of CENVAT Credit on Capital goods, inputs and input services during the entire period from 2008-09 to 2014-15, raising any demand again by invoking extended period of limitation is not sustainable. It is therefore submitted that the entire demand of Rs. 69.07....
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....al power of Attorney Holder. A General power of Attorney holder is merely an agent who acts on behalf of and as per the instructions of the principal. Hence, he is not liable to penalty in terms of Section 78A of the Finance Act, 1994. This view has also been accepted by the Hon'ble Supreme court in the case of Suraj Lamp and Industries Pvt Ltd vs State of Haryana & Anr (2012) 1 SSC 656. From the alleged non- payment of service tax by KVMR, the intention of the appellant to evade service tax cannot be presumed without any evidence on his involvement and intention to evade tax. Evasion of service tax needs to be distinguished from failure to pay service tax. There was no mala fide on the part of the appellant to evade service tax. The fact of mere being in charge of the affairs of the company itself is not a ground for imposition of penalty, in terms of Section 78A of the Finance Act, 1994. Penalty has been imposed on the appellant in a mechanical manner, without bringing on record any evidence as to the role played by him nor has any mala fide on part of the appellant has been established. Accordingly, he submitted that the penalty imposed on him is liable to be set aside. 24.....
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....rity has rightly confiscated the capital goods and imposed redemption fine and penalty on Mythri Infra in the impugned order. 25.2. Regarding invocation of extended period of limitation to demand service tax, he contends that the issues involved in the Show Cause Notice dated 17.10.2016 issued to the appellant are totally different from the issues involved in the impugned order; since, the appellant has not disclosed these details in the ST-3 returns filed by them, extended period has been rightly invoked to confirm these demands. 25.3. Subsequent to personal hearing, the Ld. Authorized Representative of the Revenue made a written submission substantiating the confirmation of the demands in the impugned order, which are summarized below: (i) Regarding inclusion of the value of free supply materials in the assessable value for the purpose of demanding service tax, the Ld. A.R submitted that in Para 5.38 to Para 5.44, the Adjudicating authority discussed the issue in detail and on the basis of a specific piece of evidence that they charged and collected service tax amounting to Rs. 57,22,383/- on diesel, the demand has been confirmed. He submits that this is a peculiar set of fac....
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....d a similar issue in favour of department. The Kolkata Bench of CESTAT also decided a similar issue in favour of Revenue in the case of M/s J K Paper Vs CCE, Bhubaneshwar [2014 (309) E.L.T. 359 (Tri. - Kolkata)] by following above decision of Hon'ble High Court of Karnataka. Applying the principle laid down in Allied Air-Conditioning and Arasmeta Captive Power Company's case, the Hon'ble court observed that the word, 'removal' is to be understood according to the context in which the word is used. It does not always mean physical removal only. The ratio laid down by the Hon'ble Karnataka High Court in Associated Cement's case is applicable to the present case and accordingly, the Ld. Authorized Representative of the Revenue submits that once the ownership and control of the equipments, machineries are transferred to another legal entity, even if it is situated in the same factory premises, it would be construed as 'removal' within the meaning of Rule 3(4) of the CENVAT Credit Rules, 2004 and CENVAT Credit on the capital goods availed by the transferor is liable to be recovered. (iv) Regarding the irregular availment of CENVAT Credit on capital goods, inputs and input services, th....
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....nd input services and a major portion of the same is admitted by them. There are sufficient evidences on record to show their mala fide intention. Accordingly, he justified the invocation of extended period of limitation. In this regard, he relied upon Apex Court's decision in the case of UOI Vs Dharmendra Textile Processors [2008 (231) ELT 3 (SC)] and in the case of Rajasthan Spinning and Weaving Mills [2009 (238) ELT 3 (SC)]. He also relied upon the decisions of Hon'ble High Court in the case of CCE Vs Haryana Industrial Security Services [2011 (21) STR 210 (P & H)] and in the case of CCE, Mangalore Vs K Vijaya C Rai [2011 (21) STR 224 (Kar)]. He further relied upon the decisions of Hon'ble Tribunal in the case of Shiv Network Vs CCE [2009 (14) STR 680 (Tri-Ahmd)] and in the case of CCE Vs Ajay Sales Agencies [2009(13) STR 40(Tri-Ahmd)]. 25.4. In view of the above submissions, the Ld. Authorized Representative of the Revenue justified the demands of duty, interest and penalty confirmed in the impugned order. Accordingly, he prayed for rejecting the appeals filed by the appellants. 25.5. In response to the submissions made by the Ld. Departmental Representative, the appellant pr....
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....e depreciated value in terms of Rule 3(5A) of the CCR 2004, would arise only at the time of removal of the capital goods. It is a fact on record that the capital goods were physically not removed from the premises where they were located prior to the Novation Agreement. 27.2. We observe that the impugned order has sought reversal of proportional credit on the depreciated value as per Rule 3(5A)(a) of the CENVAT Credit Rules. For the sake of ready reference, the said Rule is reproduced below: 3(5A) (a) If the capital goods, on which CENVAT credit has been taken, are removed after being used, the manufacturer or provider of output services shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CENVAT Credit, namely :- for computers and computer peripherals : for each quarter in the first year @ 10% for each quarter in the second year @ 8% for each quarter in the third year @ 5% for each quarter in the fourth and fifth year @ 1% 27.3. From the Rule extracted above, we observe that the Rule en....
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....a factory or any other place or premises of production or manufacture of the excisable goods etc. The Explanations to Rules 9 and 49 do not contain any definition of "place of removal", but provide that excisable goods produced or manufactured in any place or premises at an intermediate stage and consumed or utilised for the manufacture of another commodity in a continuous process, shall be deemed to have been removed from such place or premises immediately before such consumption or utilisation. Clause (b) of sub- section (4) of Section 4 has defined "place of removal", but it has not defined 'removal'. There can be no doubt that the word 'removal' contemplates shifting of a thing from one place to another. In other words, it contemplates physical movement of goods from one place to another." 27.6. In his submission, the Revenue relied upon the decision in the case of CCE, Belgaum Vs Associated Cement Co Ltd [2009 (236) ELT 240(Kar)] and contended that the word, 'removal' is to be understood according to the context in which the word is used. The ratio laid down by the Hon'ble Karnataka High Court in Associated Cement's case is applicable to the present case and accordingly, the ....
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....relying on the decisions cited above, we hold that the confiscation order in respect of the capital goods [48 in number] is not legally sustainable. Since, the confiscation of the capital goods is legally not sustainable, the question of imposing redemption fine does not arise. Accordingly, we set aside the confiscation of the 48 numbers of capital goods and the redemption fine imposed in the impugned order. We also set aside the demand of Rs. 3.51 crores on the impugned capital goods and the mandatory penalty imposed on M/s K V Mohana Rao and Company Pvt. Ltd., and allow the Appeal filed by the appellant number 1 to this extent. 27.8. Regarding the penalty of Rs. 3.51 crores imposed on M/s. Mythri Infra, we observe that as per the Novation agreement M/s. Mythri Infra are the recipient of the capital goods. Further we find that in the show cause notice proposing confiscation of the capital goods, there was no proposal to impose penalty on M/s. Mythri Infra for the alleged offence of clearance of the capital goods without reversal of proportional CENVAT Credit. Thus, we observe that the Adjudicating authority has travelled beyond the scope of the Show Cause Notice and imposed penal....
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.... Rear Dumper 4 1013520/- 35 1368252/- 65/30.08.2012 BEML BH 60M Rear 5 1013520/- 36 1368252/- 66/31.08.2012 BEML BH 60M Rear 1 1013520/- 37 1368252/- 7888967/7.9.2012 EC700C L (Volvo Excavat or) 7 2419334/- 38 2244281/- 200550/15.9.2012 IDM 30 Blast hole Driller 8 12,54,540/- 39 846815/- DS/121079/31.10.2012 Escorts Hydra Crane 9 69,216/- 40 93442/- 101035/30.06. 2011 Crawlar CM 341 32 101830/- 24 224025/- Nil/17.8.2011 Crushing Plant 34 406850/- 2 935755/- 12735- I/31.10.2011 Motor Grader BG- 36 535600/- 28 361527/- E74036/12.10.2011 D-50 Bull Dozer 37 478950/- 29 323289/- E74037/31.10.2011 D-80 Bull Dozer 38 695250/- 27 469290/- 052/2013/22.7.2013 Generat or Set 500KVA 39 113835/- 30 158168/- E74176- I/22.2.2012 BD-65 Bull Bull Dozer 1 643750/- 31 466716 052/2013/22.7.2013 Generat or Set 500KVA 4 74138/- 30 158168/- 101035/30.06.2011 Crawlar CM 341 24 101830/- 24 224025/- Nil/17.8.2011 Crushing Plant 26 406850/- 2 935755/- Total 1,36,61,842/- 156,50,768/- 28.1. A comparative study of the details furnished in the above cited statement with the related Sl. Nos. ....
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.... Rs. 5.91 crores on free supply material: 29. Regarding the remaining demands confirmed in the impugned order, we observe that demand of service tax of Rs. 5.91 Crore has been confirmed in the impugned order on account of materials supplied free of cost by the service recipient. We observe that the issue is settled against the Revenue by the Hon'ble Apex Court vide judgement in the case of M/s. Bhayana Builders (P) Ltd. etc. [2018 (10) G.S.T.L. 118 (S.C.)]. The decision in Bhayana Builders (P) Ltd. (supra)has been reiterated by the Hon'ble Supreme Court in the case Jayhind Project Ltd. Vs. Commissioner of Service Tax, Ahmedabad [2024 (388) E.L.T. 38 (S.C.)]. We also find that this Tribunal in Appeal No.ST/75673/2021 has decided the same issue vide Final Order No. 75972 of 2024 dated 02.05.2024 [CESTAT, Kolkata] wherein this Tribunal has set aside the demand on free supply material with regard to M/s. Mythri Infra in respect of the same Mining Contract assigned to them in terms of an Assignment and Novation Agreement dated 29.10.2015 .We observe that the said appeal covers all the issues as of the present appeal, in relation to free supply material. The relevant part of the said de....
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.... the appellant. The relevant paragraphs in the said judgement are extracted herein below: 11. As already pointed out in the beginning, all these assessees are covered by Section 65(25b) of the Act as they are rendering 'construction or industrial construction service', which is a taxable service as per the provisions of Section 65(105)(zzq) of the Act. The entire dispute relates to the valuation that has to be arrived at in respect of taxable services rendered by the assessees. More precisely, the issue is as to whether the value of goods/materials supplied or provided free of cost by a service recipient and used for providing the taxable service of construction or industrial complex, is to be included in computation of gross amount charged by the service provider, for valuation of taxable service. For valuation of taxable service, provision is made in Section 67 of the Act which enumerates that it would be 'the gross amount charged by the service provider for such service provided or to be provided by him'. Whether the value of materials/goods supplied free of cost by the service recipient to the service provider/assessee is to be included to arrive at the 'gross amount', or not....
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....ion that the value of goods/material that is provided by the service recipient free of charge is not to be included while arriving at the 'gross amount' simply, because of the reason that no price is charged by the assessee/service provider from the service recipient in respect of such goods/materials. This further gets strengthened from the words 'for such service provided or to be provided' by the service provider/assessee. Again, obviously, in respect of the goods/materials supplied by the service recipient, no service is provided by the assessee/service provider. Explanation 3 to sub- section (1) of Section 67 removes any doubt by clarifying that the gross amount charged for the taxable service shall include the amount received towards the taxable service before, during or after provision of such service, implying thereby that where no amount is charged that has not to be included in respect of such materials/goods which are supplied by the service recipient, naturally, no amount is received by the service 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 provisio....
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.... the same Service tax demand of Rs. 33.84 crores: 30. Regarding the demand of service tax of Rs. 33.84 crores, we observe that this is a combined demand covering service tax on various categories. The break-up of this demand and examination of the evidence available with respect to each demand is as below: 30.1. Bauxite Ore Transportation: Demand Rs. 9.03 crores. 30.1.1. This demand has been confirmed on the Goods Transport Agency (GTA) service rendered by the appellant on reverse charge basis. We observe that in respect of GTA service, service tax under reverse charge mechanism is liable to be paid by the service recipient, in terms of Section 68(2) of the Finance Act, 1994 read with Notification No.30/2012- ST. In this case, the service recipient, M/s. Utkal Aluminium, falls within the ambit of one of the 'persons' liable to pay tax, as they are the 'consignees'. We also observe that the service recipient M/s. Utkal Aluminium has confirmed that they have paid the service tax on the GTA service as recipient of service. Thus, we hold that the demand of service tax from the appellant again is a double taxation which is legally not sustainable. 30.1.2. We observe that the only g....
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....d of service tax of Rs. 9.03 crores cannot be confirmed on the basis of a single invoice without verification of all the invoices that too when this single invoice relied upon, belies the allegation of the Revenue. In this regard, we derive support from the judgment in the case of M/s. R.S. Ispat Pvt. Ltd. Vs. CCE, Kolkata-IV and Shri Radhe Shyam Agarwal, Director M/s. R.S. Ispat Pvt. Ltd. Vs. CCE, Kolkata-IV, 2024 (9) TMI 176 - CESTAT Kolkata. Since, the appellant is not the 'person' liable to pay service tax under the category of GTA service and the evidence submitted by the appellant indicates that they have not collected service tax on this service and the appellant claims that the service recipient has already paid service tax on this category, we hold that the demand of service tax of Rs. 9.03 crores confirmed under the category of GTA service from the appellant, is not legally sustainable. 30.2. Reimbursable expenditure: Demand of Rs. 4.78 crores. 30.2.1. This demand pertains to procurement of HSD by the appellant in case of exigency. We observe that as per Clause 5.10 of the contract dated 14.05.2012, such expenses of procurement are liable to be reimbursed by the service....
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....features as also in the implication as to its meaning that arise by presumptions as to the intent of the maker thereof. 28. Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of the past. If we do something today, we do it keeping in view the law of today and in force and not tomorrow's backward adjustment of it. Our belief in the nature of the law is founded on the bedrock that every human being is entitled to arrange his affairs by relying on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as lex prospicit non respicit : law looks forward not backward. As was observed in Phillips v. Eyre [(1870) LR 6 QB 1], a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced for the first time to deal with future acts ought not to change the charac....
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..... We observe that as per the Payment Advice No.51411435 connected to this invoice, service tax amounting to Rs. 57,22,383/- only (on a value of Rs. 4,62,97,594/-) was reimbursed but not on the entire value of Rs. 20,76,92,552/- which amount is inclusive of the advances received by the appellant under this head upto this date. The appellant submitted that except this one bill, they have not raised service tax in any other bills of diesel reimbursements. We thus observe that the investigation has not brought in any other evidence to establish that the appellant has collected the service tax on all the amounts reimbursed towards diesel reimbursements upto this date except to the above extent. The appellant produced documentary evidence - challan no. 066 dated 30.01.2015 and corresponding ST3 return for the period Oct, 2014 to Mar, 2015 - to the effect that they have discharged the above service tax liability (along with interest amounting to Rs. 9,31,259/-) since it was collected from the service recipient. For ready reference, the said challan is extracted and reproduced below: 30.2.4. In view of the legal position on this issue and the decision of the Hon'ble Apex Court cited above....
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....ted and the remaining amount only was paid to them. We observe that the ld. adjudicating authority has confirmed this demand by taking into account the gross value again in the impugned order without considering the factual position that the said advances were adjusted from the gross values of the said final bills / invoices that would make it as a double demand on the advances. The appellant submitted each of the above cited 28 RA bills / invoices and the corresponding payment advices issued by the service recipient in support of their stand of double demand. 30.3.2. As an illustration, we reproduce the following two instances of double demand in this regard. Service Tax Invoice no. 5 dated 02.06.2014. Gross Bill amount Rs. 4,17,51,692/- less mobilization advance @10% Rs. 41,75,169/- Taxable value Rs. 3,75,76,523/- Service Tax@12% Rs. 45,09,183/- Education Cess @2% on ST Rs. 90,184/- SHE Cess @1% on ST Rs. 45,092/- Total ST paid after adjusting mobilization advance Rs. 46,44,458/- As against the above, Service Tax liability indicated in Annexure - A4 to the Show Cause Notice in respect of this invoice on gross value without considering mobilization advance, is Rs....
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.... on page 64 of Vol. I. The amount received under the mining advances head was of the order of Rs. 55,79,44,031/- and the demand from the Revenue on this count is Rs. 3,55,89,882/- as per the said details. The said advances were adjusted under 13 RA bills / invoices details of which are provided on pages 64 - 65 of Vol. I. The related entries of Annexures - A3 to A5 indicate that tax liability is created on the total gross value of the said final bills / invoices without considering the fact that the above cited mining advances were adjusted in the said bills / invoices and the remaining amounts alone were paid to the appellant leading to a double demand of Rs. 3,55,89,882/- on the said advances. 30.3.7. The appellant also received ADHOC mining local payments amounting to Rs. 7,38,50,000/- under 9 payment advices (page nos. 399 to 414 of Vol. IV) during the year 2013-14 as per the details provided on page 66 of Vol. I. The said advances were adjusted from the final bill no.1 dated 06.05.2014 for Rs. 8,74,01,930/- which position is confirmed by the corresponding payment advice no. 51404145 dated 22.07.2014 (page nos. 416 to 420 of Vol. IV). The related S. Nos. 20, 23, 36, 39, 47, 54....
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....confirmed in the impugned order is not legally sustainable. 30.4. Confirmation of demand of Rs. 1.96 crores on supply of material: 30.4.1. We observe that in this regard, the appellant submitted that this is a case of demand of service tax on supply of materials. They have submitted the evidence of a specific payment advice (page no. 500 of Vol. IV) which is mentioned in S. No.5 of Annexure - A4 to the Notice, which contains the following details: * Payment Advice No.51401372 dated 15.05.2014. * Name of Client: M/s UAIL. * Work / Service description: Supply of Material for construction of Red Mud Storage Dam. * Work Order No. 21000078. * Nature of Service: Site Formation. * Bill Amount: Rs. 15,86,13,625/-. * Total taxable value: Rs. 15,86,13,625/-. * Service Tax: Rs. 1,60,33,635/-. * Ed. Cess: Rs. 3,80,673/-. * SHE Cess: Rs. 1,60,335/-. * Total Rs. 1,66,04,644/-. 30.4.2. From the above details, provided by the Revenue against the said S. No.5 of the Annexure, we observe that this transaction is a pure supply of materials. However, in the impugned order, the nature of service has been indicated as Site Formation Service. In this backdrop, the appellant produ....
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....ject Construction Corpn. Ltd. [2020 (42) G.S.T.L. 75 (Tri. - Del.)] ii. Rajendra Singh Bhamboo vs. Commr. of C. Ex. & S.T., JAIPUR-I [2019 (22) G.S.T.L. 278 (Tri. - Del.)] 30.5.4. The Tribunal Delhi in the case of Commr. of Cus. & C. Ex., Raipur vs. National Project Construction Corpn. Ltd.(supra) has held as under : "9. Having considered the rival contentions, we hold that under the admitted facts and circumstances in this appeal, the service rendered by the appellant is taxable only and the category of works contract service in view of the law laid down by Hon'ble Supreme Court in Larsen & Toubro (supra). Secondly, we hold that the work relating to road construction, even in the premises of NTPC, which may be termed as private road is exempt service as per the definition of works contract service which specifically exempts 'road service'. There is no distinction made out by the Legislature with respect to public road and private road. We further find that admittedly, the appellant have paid the Service Tax under the works contract composition scheme along with the interest. We hold that the appellant is entitled to pay tax under the 'works contract composition scheme' and on....
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....pellant collected service tax in those two cases. 30.5.6. As the activity of construction of road is exempted from payment of service tax as per Notification No. 25/2012-ST, fortified by the cited case law and documentary evidence placed to the effect that no Service Tax was collected by the appellant, we hold that the demand of Rs.1.49 crores confirmed in the impugned order on this count is legally not sustainable. 30.6. Confirmation of demand of Rs. 1.15 crores on Commission: 30.6.1. We observe that the appellant has sub- contracted some of the work orders to the sub- contractors on back-to-back basis in which case the appellant paid service tax on the entire contract value. While disbursing this amount to the sub-contractors, they retained their profit margin and TDS and paid the remaining amount to the sub-contractors. It is on this profit margin that the above demand is confirmed with a nomenclature 'Commission'. 30.6.2. Shri M. V. Ravichandra, Managing Director of the Appellant Company, in his statement dated 07.09.2016, in response to question no.41 stated that some of the contracts were sub-contracted to Shri T. Srinivasa Rao for execution; in terms of the agreements en....
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....ustomer or vendor, public relation services, management or supervision and includes services as a commission agent, but does not include any activity that amounts to manufacture of excisable goods but does not include any information technology service and any activity that amounts to" manufacture" within the meaning of clause (f) of section 2 of the Central Excise Act, 1944. Explanation. - For the removal of doubts, it is hereby declared that for the purposes of this clause,- (a) "commission agent" means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person- (i) deals with goods or services or documents of title to such goods or services; or (ii) collects payment of sale price of such goods or services; or (iii) guarantees for collection or payment for such goods or services; or (iv) undertakes any activities relating to such sale or purchase of such goods or services;" In the present case, from the factual details discussed on the issue, the activity would not fall under (i) to (vi) above. Coming to the entry ....
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.... railway lines. We observe that Sl. No. 14(a) of Notification No. 25/2012-ST dated 20.06.2012 envisages that all original works by way of construction, erection, commissioning or installation in relation to 'Railways' are exempt from service tax. As per Section 2(31)(b) of Indian Railways Act, 1989, "all lines of rails, sidings, or yards, or branches used for the purpose of, or in connection with a railway;" are considered as part of railways only. We observe that this definition clearly indicates that even private sidings / lines are deemed to be railway sidings / lines. Accordingly, we observe that this definition clearly confirms that the services rendered in relation to railway line / siding meant for the use of UAIL would qualify for the exemption in terms of Notification No. 25/2012-ST. Thus, upon a harmonious reading of the Finance Act, 1994 with the Indian Railways Act, 1989, we hold that the impugned works rendered by the appellant related to Railways are exempt from service tax. 30.7.2. This issue stands decided in the following case laws : i. Commissioner of Central Excise, Raipur vs. Anand Construction [2017 (51) S.T.R. 435 (Tri. - Del.)] ii. Commr. of Cus. &C.Ex.,....
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....2017 clearly states that the income relating to red mud pond has been covered in the Notice dated 17.10.2016 and that the same are excluded from the present proceedings. We observe that the present demand is covered by S. No. 68 of Annexure - A3 and S. No. 75 of Annexure - A4 wherein details of the related two invoices are provided. Exactly the same two demands figure in the last two entries in Annexure - 9 to the Show Cause Notice dated 17.10.2016 clearly revealing that it is a double demand. We observe that the Ld. adjudicating authority has not given any findings on the submissions made by the appellant on this demand in the entire Order-in- Original. Thus, we hold that the demand raised in the instant notice is a double demand as the demand on this issue has already been covered in the Notice dated 17.10.2016. We accordingly hold that this demand of Rs. 92.46 lakhs is not legally sustainable. 30.9. Eastern piling - Demand of Rs. 12.36 lakhs (S. Nos. 28 & 41 of Annexure - A3 on Page Nos. 123 - 126 of Vol. V): 30.9.1. We observe that the amount involved in this demand pertains to lump sum compensation paid by the appellant on behalf of UAIL and got reimbursed later. We observe ....
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....ld that the demand of Rs. 28,38,310/- confirmed in the impugned order is not sustainable and hence the same is set aside. 30.11. Confirmation of Demand of Rs. 78.96 lakhs: 30.11.1. The appellant submitted that this is a double demand on the advances received and the tax thereon was paid earlier at the time of receipt of advance. This demand relates to S. Nos 12, 16 & 17 of Annexure - A3. The total demand of the 3 invoices shown as liability is Rs. 1,50,74,782/- (36,78,374 + 68,19,229 + 45,77,179). In respect of the above 3 transactions, the appellant obtained advances amounting to Rs. 7.47 crores (2cr + 4.47cr + 1cr) during the year 2011-12. The Appellant claimed that they have already paid service tax amounting to Rs. 46,85,866/- under challan no. 127 dated 30.07.2012 and Rs. 22,89,746/- under CENVAT Credit on the said amounts. The appellant submitted the related ledger accounts and challan evidencing payment of service tax (page no. 611 to 613 of Vol. IV). We observe that these advances on which service tax has already been paid, are adjusted in the present bills. However, the investigating agency has taken into consideration the gross amount for the purpose of computation of t....
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....emand. It is on record that this invoice was cancelled and a revised invoice was issued for which no service tax was paid by the service recipient to the appellant. This citation therefore will not be of any help to the Revenue. Accordingly, we hold that the demand confirmed in the impugned order on this count is not sustainable and hence we set aside the same. 30.13. Works Contract Service: Confirmation of demand of Rs. 22.87 lakhs (S. No. 7 of Annexure - A3 and S. Nos. 21 & 22 of Annexure - A4 - pages 123, 127 & 128 of Vol. V): 30.13.1. The appellant submitted that the activities undertaken by them are related to construction of boundary wall of Red Mud Pond and installation of chain link fences around Red Mud Pond. (S. No. 7 of Annexure - A3 and S. Nos. 21 & 22 of Annexure - A4 - pages 123, 127 & 128 of Vol. V). These services are appropriately classifiable as 'Work Contract Service' and accordingly, they have collected and correctly paid service tax under 'Works Contract Service' on these three transactions. In the notice dated 24.09.2012 issued by DGCEI, the work orders relating to Red Mud Pond were classified under Works Contract Service. Notice dated 17.10.2016 also held t....
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....i Station to UAIL Plant. This work in connection with railway siding is not taxable as discussed in para 30.7 supra. The appellant submitted that they have paid service tax in respect of this transaction to the exchequer in the normal course. In support of their claim, they submitted invoice no. 1 dated 03/04.09.2012 of the Annexure - A2, Payment Advice No. 31403356 dated 12.09.2012 and connected tax payment challan no. 106 dated 27.09.2012 (pages 129 - 131 of Vol. III). We observe that these documents evidence that the appellant has paid the service tax on this transaction. 30.14.3. The next demand relating to S. No. 2 of the Annexure - A2 is related to road works. In view of the discussions at paragraph 30.5 supra, the appellant is eligible for the benefit of exemption Notification No. 25/2012. Accordingly, we hold that the demand confirmed in the impugned order relating to road construction activities is not sustainable. 30.14.4. Another part of the demand at S. No. 3 is related to 'Commission' received by the appellant. In view of the discussions at paragraph 30.6 supra, we hold that this amount is not liable to service tax and accordingly this demand amounting to Rs. 39,89,5....
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.... set aside the same on the ground of limitation. 31. Confirmation of CENVAT credit demand of Rs. 69.07 lakhs on inputs and input services: 31.1. We observe that the above demand has been raised for 3 years - 2013-14, 2014-15 & 2015-16 - and the demand details are provided in the Annexures - C-1, C-2 & C-3 as Rs. 43,66,149/-, Rs. 12,15,906/- & Rs. 13,25,621/- respectively. 31.2. This demand has been confirmed in the impugned order on the ground that the appellant had taken excess credit in certain cases and in some other cases availed credit without any supporting documents / proper duty paid documents. This demand has been challenged by the appellant on merit front as well as limitation front. 31.3. In respect of this demand, the appellant vehemently contended that the demand fails on limitation front in view of the successive audits and another Show Cause Notice dated 17.10.2016, issued under extended period. It is their plea, when the service tax audit raised an objection, during the audit of its accounts for the year 2014-15, requiring them to reverse proportionate CENVAT Credit amounting to Rs. 11,19,214/- on the ground that they made taxable as well as non-taxable clearanc....
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....848 Input / Input Service credit pertaining to 2015-16 towards which M/s KVMR & Co. Pvt. has submitted duty payment documents during the course of investigation as detailed above 22,77,863 2,94,044 25,71,907 Total Input / Input Service credit taken without support of duty payment documents / in excess of the eligible credit as evidenced by duty payment documents for the year 2015-16 0 13,25,621 13,25,621 31.7. In this regard we find that the demand has been computed as per Annexure - C3. A perusal of Annexure - C3 shows that there is a mismatch between the CENVAT credit availed as 'inputs and input services'. Both inputs and input services put together the appellant produced documents evidencing availment of credit of Rs. 25,71,907/- as against the availment of credit of Rs. 27,63,848/-. This has been accepted by the department in the Annexure - C3. However, we observe that the department has taken the difference between Rs. 16,19,665/- and Rs. 2,94,044/-, amounting to Rs. 13,25,621/-, as the ineligible credit for the year 2015-16. The department has not considered the difference between Rs. 22,77,863/- and Rs. 11,44,183/-, for which documents have been produced by the app....
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....ed with. Various objections were raised including payment of service tax, interest, reversal of CENVAT Credit. From the correspondence, we observe that the department is very well aware of the free supply materials, reimbursable claims, exemptions availed by the appellant on roads, railways and non- payment of service tax on Bauxite ore transportation, commission etc. 32.2. The Investigating Officer who investigated the case pertaining to the show cause notice dated 17.10.2016 also called for various documents like invoices, bills, supplementary invoices, debit notes, reimbursement claims, form 26AS and audited annual balance sheets and P&L accounts for the same period as of above. This notice clearly acknowledges: "..... the noticee have executed various works like construction of Road, Mining and Transportation of Bauxite .....". (para 3.2) ".... in as much as on many of such output services like construction of Roads, Transportation of ores, etc., which consumed the above labour expenses, they have not paid any service tax claiming exemption or due to shifting of the liability to the service receiver." (para 4.4) 32.3. It is thus clear that: * The Department was very muc....
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....rmal period. The appellant, in their comments, in response to the above, admitted the contention of the former. In dealing with this demand, the appellant, making the Annexure - A5 to the notice, covering this demand, as the basis, came up with their arguments and furnished the details of demand in two annexures - Annexure - I & II. In the Annexure - I, the appellant provided the details of invoice-wise demands of Annexure - A5 to the notice wherein they agreed with the tax liabilities shown by the department in the Annexure - A5. In other words, they have no dispute with regard to the demand in respect of 39 invoices detailed in Annexure - I made by the appellant. The appellant contested the demand in respect of the remaining 12 invoices, details of which are provided by them in the Annexure - II. Broadly, the reasons for disagreement are provided as under: * Mobilization advance on which the appellant paid tax when it was received, was subjected to tax for a second time in respect of 6 invoices, wherein tax liability was indicated on the total gross value of the final bill without considering the adjustment of mobilization advance - demand involved - Rs. 40,72,803/-. * Demand....
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....e grounds discussed in paragraph 30.6 supra. 33.5. Thus, we observe that out of the total service tax liability of Rs. 11,81,97,28/- for the Financial year 2015-16, the appellant has paid service tax amounting to 8,93,40,239/-, which is not in dispute. The balance amount of Rs. 2,88,57,048/- is part of the impugned demand under various heads. These issues are discussed in various headings in Paragraph 30 supra. According to the appellant, all these demands fall under the categories of double demands / exempted services / services leviable to tax under RCM, which are discussed in paragraph 30 supra. The break-up figures for the normal period under each of the categories discussed in paras 30 needs to be verified. If they fall within the categories, held as double demands / exempted services / services leviable to tax under RCM in this order, set aside by us on merits, then there won't be any liability on the appellant. Accordingly, the demand for the normal period of limitation as quantified by the appellant is remanded back to the adjudicating authority to verify the correctness of their claim under each of the categories claimed by the appellant in terms of the above directions. ....
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....vice Tax component has been paid by the recipient, then Service Tax has been discharged by the appellant. Further, we observe that the provisions of Section 12B of the Central Excise Act, 1944 is not relevant as the same are applicable for refund of duty collected. 34.2. We examined the issues involved in the impugned order on the basis of the above observations mentioned in para 34.1 supra. We observe that in respect of some of the issues such as inclusion of the value of free supply materials and reimbursable expenditures in the assessable value, liability of service tax on road works and railway works and service tax liability on goods transportation where the liability of payment of service tax is under RCM by the service recipient, the appellant has raised service tax in some of the bills / invoices. The liability of service tax on all these activities have been discussed in paras 30.1 to 30.14. The appellant submitted that in respect of the cases where they have billed the service tax in the bills / invoices and collected the same from the service recipient, they have paid the same to the exchequer. However, in many cases, even though they have billed service tax in the bill....
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....V. Mohana Rao & Co. Pvt. Ltd., under Section 78A of the Finance Act, 1994. 35.1. The appellant, Shri M. V. Ravichandra, in his reply to the notice as well as the appeal filed before this Tribunal elaborately relied upon the reply / appeal filed by the main appellant, M/s K. V. Mohana Rao & Co. Pvt. Ltd and came up with a plea that if the contents of the appeal are taken into consideration, no demand subsists on merit as well as on limitation, in which case there is no contravention of the provisions of the Act & the Rules made thereunder. It is his further plea that in terms of Section 78A ibid, the personal liability thereunder arises only when the person concerned was knowingly concerned with the specified contraventions and that from the alleged non-payment of service tax by the main appellant - the intention of the appellant to evade service tax cannot be presumed without any evidence on his involvement and intention to evade tax. According to him, there was no mala fide on his part and that the mere being Managing Director of the company itself is not a ground for imposition of penalty in terms of Section 78A ibid. 35.2. From the discussions in the foregoing paragraphs, we h....
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....A Holder and Authorized signatory of M/s K. V. Mohana Rao & Co. Pvt. Ltd. 36. In view of the above findings, we pass the following order: (i) We set aside the confiscation of the 48 numbers of capital goods and the redemption fine of Rs. 50 lakhs imposed in the impugned order. The demand of Rs. 3.51 crores confirmed on this machinery against M/s K. V. Mohana Rao & Company Pvt. Ltd., is set aside. The Penalty of Rs. 3.51 crores imposed on both M/s K. V. Mohana Rao & Company Pvt. Ltd., and M/s. Mythri Infra is not sustainable and hence the same are set aside. (ii) Out of the demand of Rs. 3.22 crores confirmed, we uphold the demand of Rs. 1.86 crores along with interest paid by the appellant. We set aside the demand of Rs. 1.36 crores, part of the demand of Rs. 3.22 crores, on merit as well as on time bar. No penalty is imposable on the demand of Rs. 1.86 Crores paid, as it was paid before issue of the Notice. (iii) The demand of service tax of Rs. 5.91 crores, confirmed in the impugned order on account of materials supplied free of cost by the service recipient, is set aside on merit as well as on limitation. (iv) The demand of service tax of Rs. 33,28,86,315/- crores confi....