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2019 (4) TMI 937 - AT - Service TaxWorks Contract - Four SCN issued under “Commercial or Industrial Construction Services” and “Construction of Complex Services” by invoking Section 73 of the Finance Act, 1994 with interest under Section 75 and penalty under Sections 76, 77 and 78 of the Finance Act. First two SCN - benefit of Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007 - benefit of abatement denied for the reason that the appellant did not include the cost of free material supplied to the appellant in the gross amount charged for the purpose of computation of abatement - Held that:- Supreme Court in the case of Bhayana Builders (P) Limited. [2018 (2) TMI 1325 - SUPREME COURT OF INDIA] observed that the value of taxable services cannot be dependent on the value of goods supplied free of cost by the service recipient and such a value has no bearing on the value of services provided by the service recipient - The Commissioner, therefore, could not have denied the benefit of abatement merely for the reason that the appellant had not included the cost of free material supplied to the appellant in the gross value of services. The second finding recorded by the Commissioner is that the appellant should have discharged service tax @ 4.12% since this was the rate of tax when the payment was received and not 2.06% - This finding cannot also be sustained. The taxable event in relation to service tax is rendering of service and thus tax has to be levied at the rate prevailing during the period such service was provided and not the rate of tax that was prevailing at the time of the payment - thus, the demand confirmed by the Commissioner in the first two show cause notices deserves to be set aside. Third SCN - Demand of service tax proposed on the differential value calculated on comparing the gross amount as per the balance sheet and the gross amount as per ST-3 Returns - Held that:- The demand could not have been confirmed under “Commercial or Industrial Construction Service” for the reason that it was a composite contract and in the nature of “Works Contract Services” - The demand could not have been confirmed under “Commercial or Industrial Construction Service” in view of the decision of the Supreme Court in Larsen & Toubro Ltd [2015 (8) TMI 749 - SUPREME COURT]. Fourth SCN - Denial of cenvat credit to the appellant because the appellant had struck off column No. 5B of the ST-3 Return for the period 2010 to 2011 relating to cenvat credit taken and utilised - Held that:- This is a factual aspect inasmuch as it has to be seen whether the enclosure was enclosed with the ST-3 returns and in any case the Commissioner has not examined the same because Column 5B had been struck off. This aspect, therefore, needs to be examined by the Commissioner. It is, therefore, considered appropriate to remand the matter to the Commissioner to re-examine this Fourth Issue. Appeal allowed in part and part matter on remand.
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