2026 (9) TMI 1838

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....vice Tax (Appeals-I), Kochi. The service tax demand is Rs.5,62,598/-, and period of dispute is 2005-06 to 2007-08. 2. The brief facts are the Appellant is a civil contractor undertaking various civil contracts for M/s. BPCL, Cochin and registered under "Erection, Commissioning or Installation" Service under section 65(39a) of the Finance Act, 1994. The appellant received materials free of cost from M/s. BPCL for executing their contract works. The value of these materials were not included for valuation of taxable services. Hence, it was alleged by the department that the appellant is not entitled for abatement of 67% under Notification No. 12/2004-ST dated 10.9.2004 read with Notification No. 01/2006-ST dated 01.03.2006 and a Show cause....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....classifiable as "Works Contract" Service. 5. The learned Chartered Accountant (CA) submits that the additional demands are not sustainable for the following reasons and the 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 ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e. The learned Commissioner (Appeals) has dropped the penalties levied under section 76, 77 and 78 relying on section 80 of the Finance Act, 1944 due to bona fide belief as a reasonable cause, however justified the invocation of extended period of limitation, which is not justified under the facts and circumstances. 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 ....