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2017 (10) TMI 407 - CESTAT MUMBAIWorks contract service - valuation - inclusion of material supplied free of cost by the service provider in assessable value - the eligibility of the abatement N/N. 15/04-ST where under 67% abatement from the value of construction service provided - Held that: - From the Explanation clause (a) (1) which can be seen that for the purpose of value of goods used in or in relation to the excecution of the works contract value of all the supplies which for a consideration or otherwise should be added. Therefore it is clear that whether the goods used by the service provider or otherwise supplied by the service recipient free of cost, value of all the goods should be included to arrive at the gross value of works contract - the value of free supply material also be added in the gross value of works contract, therefore the demand is sustainable on merit. Extended period of limitation - penalty u/s 78 - Held that: - the appellant having knowledge about the inclusion of free supply material did not include the same and also suppressed the said fact from the department. It is also observed that they did not disclose the value of the free supply material in their ST-3 returns. This is not the case where the issue was under litigation or there is any interpretation of law involved - demand of extended period is sustainable - for the same reason the penalty imposed under Section 78 upheld. Appeal dismissed - decided against appellant.
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