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2019 (4) TMI 535 - AT - Service TaxShort payment of Service tax - Commercial Construction Services - recovery of short paid service tax with interest and penalty - inclusion of value of free supplied material in assessable value - Exemption Notification dated 01 March, 2006. Inclusion of Cost of material supplied free by the service recipient - non-consideration of judgement on which reliance was placed upon - principles of natural justice - Held that:- The decision of the larger Bench of the Tribunal in Bhayana Builders (P) Ltd. [2013 (9) TMI 294 - CESTAT NEW DELHI (LB)] and the decision of the Supreme Court in Bhayana Builders (P) Ltd. [2018 (2) TMI 1325 - SUPREME COURT OF INDIA], are clearly applicable to the facts of the case inasmuch as the charge in the show cause notice was that the cost of free supplied material should have been included in the gross value. The Commissioner has ignored the decision of the larger Bench by simply observing that the facts of the case before the Commissioner were not squarely covered, without even giving any reason as to why they were not covered. In fact, as noticed above, the issue required to be decided by the Commissioner stood answered in favour of the Appellant in the said decision - there is no hesitation in setting aside the finding recorded by the Commissioner that the value of goods supplied free of cost to the Appellant was required to be included in the gross value. Denial of benefit of Exemption Notification dated 01 March, 2006 - denial for the reason that the Appellant had availed the benefit of Cenvat Credit in relation to the work order relating to soil testing - Held that:- The proviso to the Exemption Notification dated 01 March, 2006 provides that the Notification shall not apply if the Cenvat Credit has been used for providing 'such taxable service'. The taxable service under consideration is 'Commercial or Industrial Construction Service'. The Cenvat Credit availed by the Appellant in regard to ‘Consulting Engineer Service’ cannot, therefore, be taken into consideration - The Appellant had not availed any input credit for the second works order relating to actual construction. It cannot be urged that the taxable service of ‘Consulting Engineer Service’ can be considered as a composite service with ‘Commercial Construction Service’ since it has an essential character of construction - the benefit of Exemption Notification dated 01 March, 2006 cannot be denied. Benefit of abatement of service tax - demand of Service Tax amounting to ₹ 7,81,030/- on amount of ₹ 63,19,012/- - Commissioner has recorded that the benefit of 67% abatement obtained by the Appellant would not be available as the Appellant did not fulfil the condition of the said Exemption Notification dated 01 March, 2006 - Held that:- The Appellant had taken a specific stand in response to the show cause notice that the details in the data sheet were of invoices submitted to M/s GTL from May 2007 to August 2007 against which the Appellant expected payments to be made, but had actually received payment in 2008 and, thereafter, the Service Tax on the payment received against these invoices were paid on 09 July, 2008 and were included in the ST-3 Returns for the period April, 2008 to September, 2008. This factual position has been found to be correct by the Commissioner, but what prevailed upon the Commissioner to deny the benefit of 67% abatement claimed by the Appellant was that the conditions set out in the Exemption Notification dated 01 March, 2006 had not been fulfilled. The order dated 28 August, 2014 passed by the Commissioner is set aside - Appeal allowed - decided in favor of appellant.
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