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2023 (2) TMI 371 - AT - Service TaxDenial of benefit of N/N. 1/2006-ST dated 01.03.2006 - denial on the ground that the appellant has not included the value of free supply given by the service recipient - non availment of cenvat credit on input before allowing the benefit of Notification No. 32/2007-ST dated 22.05.2007 - rejection of amount of excess adjustment mentioned in the show cause notice - penalty imposed under Section 78 of the Finance Act, 1994. If the Commissioner has rightly denied the benefit of notification no. no.1/2006-ST dated 01.03.2006 on the ground that the appellant has obtained some free supplies from the service recipient while executing the Commercial, Industrial Construction Service for the service recipient? - HELD THAT:- The Hon’ble Apex Court in the case of BHAYANA BUILDERS (P) LTD. [2018 (2) TMI 1325 - SUPREME COURT] has held that the value of free supplies cannot be included in the gross amount charged for the purpose of levy of service tax - In view of the clear observations of the Hon’ble Apex Court, the order of the Commissioner to the extent it demands duty on the value of free supplies is set aside and appeal of M/S. DEEP CONSTRUCTION COMPANY to that extent is allowed. Availment of exemption notification No. 32/2007-ST dated 22.05.2007 - ground on which the benefit of the said notification is sought to be denied is that the appellant has availed the benefit of cenvat credit - HELD THAT:- The Commissioner has examined a few invoices and the ST-3 returns of the year 2009-10 and some worksheets with ST-3 returns to conclude that no input credit has been taken. The revenue has argued that conclusion reached on the basis of a few invoice cannot be sustained. The notifications are to be interpreted strictly and if M/S. DEEP CONSTRUCTION COMPANY has availed any cenvat credit of any inputs used while availing notification 32/2007-ST dated 22.05.2007 then the benefit of said notification cannot be granted. We find merit in the argument of the revenue - the impugned order is set aside and the matter is remanded to the original adjudicating authority for fresh adjudication after verifying the facts fully. Rejection of amount of adjustment mentioned in the SCN - HELD THAT:- The Commissioner in his order has held that the said amount is incorrect. It is seen that while coming to the said conclusion Annexure D to the show cause notice has not been fully examined. Annexure-D to the show cause notice gives month wise list of adjustments made by the appellant - there is merit in the appeal filed by the revenue to the extent that no reasoning has been given by the Commissioner for rejecting the amount mentioned in the show cause notice which is duly supported by Annexure-D to the show cause notice. The order in this regard is set aside and matter is remanded. Imposition of penalty under Section 78 - HELD THAT:- It is apparent that the return for the period 2008-09 and for the first half of the year 2009-10 has been filed belatedly which itself can possibly be a cause for invoking suppression. Merely because penalty under Section 78 has been imposed for the earlier period, no penalty can be imposed for any subsequent period is a misplace notion. There is nothing in the section 78 to support this view. So long as the element necessary for imposing penalty under Section 78 are present even for the show cause notices issued for the normal period of limitation, the penalty under Section 78 can be imposed. Matter remanded to the adjudicating authority to pass a fresh adjudication order - appeal allowed in part.
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