2025 (7) TMI 703

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....the course of audit of the records of the appellant, it was observed that the appellant has provided free telecom services, upto certain limit to their employees on postpaid mobile connection. Beyond this limit, the appellant has generated bills and have deposited tax on such bills. As per the Department, the appellant has not generated bills for free services and has therefore, not deposited service tax. As per audit, the value of such free services is liable to be computed under Section 67 of the Finance Act, 1994 read with Valuation Rules and tax is payable on such amount. Vide show cause notice dated 19.12.2016, tax of Rs.1,07,46,516/-not paid by the appellant was proposed to be recovered with interest and penalty under Section 78 was a....

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....e are of the opinion that telephone service provided to the employees cannot be held to be a service against some consideration which is not in cash but any kind. The service recipient being the employees of the appellant no other object then that of efficiency of appellant services is found to be a reason for given services to the employees. In the given circumstances, there is no separate service recipient then the employees of appellant itself. Resultantly, the impugned service here in is the service to self Section 67(1) of the Service Tax Act is held to have wrongly invoked as since there is no consideration to question of any taxation at all arises. The demand on this count is, therefore, hereby set aside. " 5. The learned counsel ....