TaxTMI 
TaxTMI 
2026 (9) TMI 1425
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Kochi. The service tax demand is Rs. 1,42,707/- plus interest under section 75 and penalties under section 76 and 77 and period of dispute is October 2008 to March 2009. 2. The brief facts are the appellant Shri M.P. Yacob is a civil contractor engaged in providing 'Commercial or Industrial Construction Services' as defined in section 65(105)(zzq) of the Finance Act, 1944 to M/s. BPCL. The appellant received materials like steel, cement free of cost from M/s. BPCL for executing their civil works. The value of these materials were not included for valuation of services. Hence, it was held that the appellant is not entitled for abatement of 67% under Notification No. 1/2006-ST dated 01.03.2006. A Show cause notice No. 10/2010-ST d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sifiable as "Works Contract" Service. 5. The learned Chartered Accountant (CA) submits that the additional demands are not sustainable for the following reasons and settled case laws: a. The demand is only due to denial of abatement of 67% as per Notification No. 1/2006-ST dated 01-03-2006 on the ground that the value of taxable services does not include the value of free supplies of materials by customers and also rejection of the claim of tax exemption on the ground that composite contracts cannot be vivisected and taxed as "Erection, Commissioning or Installation Service". b. The issue whether free supply material is not to be included is now settled in appellant's favour by the larger Bench of CESTAT in Bhayana ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng authority has not proposed and levied penalty under section 78, the Commissioner (Appeals) has levied the same, which is not sustainable. 6. The Learned Authorised Representative (AR) for the Revenue reiterated the findings of the Commissioner (Appeals) in the impugned order. 7. Heard both sides and perused the records. 8. The issue involved in this case is as to whether the cost of materials supplied free of cost will form part of the gross value for determination of service tax liability, which stands settled by the Hon'ble Supreme Court in the case of CST Vs. Bhayana Builders (P) Ltd. (supra) wherein the Hon'ble Supreme Court held as follows: "19. Matter can be looked into from another angle as well. In the case of C....