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2023 (10) TMI 291 - HC - Service TaxExtended period of limitation - Petitioner’s liability for payment of the service tax on works contracts executed during the period of 2014-15 to 2017-18 - It is the petitioner’s case that in terms of Section 129 of the Finance (No. 2) Act, 2019, no proceedings can be initiated in respect of service tax for the period 2014-15 to 2017-18 and no further demands can be raised - HELD THAT:- The contention that the subject matter of the impugned show cause notice and the show cause notice dated 23.04.2019 is different, is also unpersuasive. There is no dispute that the subject matter of both the show cause notices is the petitioner’s service tax liability during the period 2014-15 to 2017-18. The Revenue Authorities had commenced an investigation to ascertain the petitioner’s correct tax liability for the said period by invoking the extended period of limitation as provided under Section 73 of the Finance Act. The show cause notice dated 23.04.2019 indicates that the investigation covered the extent of services rendered by the petitioner. Summons were also issued by the Revenue Authorities to various entities for whom the petitioner had executed the construction works. The Revenue Authorities had also collected bills and invoices from the said entities. Merely because one of the entities had not furnished the bills which would have enabled the Revenue Authorities to verify the petitioner’s liability does not in any manner render the subject matter of the show cause notice dated 23.04.2019 any different from subject matter of the impugned show cause notice. There are merit in the petitioner’s contention that the impugned show cause notice is not sustainable and is liable to be set aside. The Discharge Certificate issued to the petitioner is conclusive of the subject matter of the impugned show cause notice - impugned show cause notice is liable to be set aside. Clearly, the assumption that the petitioner is liable to pay tax on FOC material supplied by M/s Charms India Pvt Ltd. is ex facie erroneous. The said issue is covered by the decision of the Supreme Court in COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT]. The Supreme Court in the said judgment held that on first principle, the value of free supply items, which are not a part of the contract between the service provider and the service recipient has no relevance in determination of the value of taxable services. The Revenue has proceeded on an ex-facie erroneous premise that NOIDA is not a body corporate on the basis that NOIDA had explained that it was neither a company registered under the Companies Act, 1996 nor a business entity registered as a body corporate. NOIDA does not require to be registered under any Act as a body corporate, as it has been constituted by the Uttar Pradesh Industrial Area Development Act, 1976 as a body corporate. Thus, clearly the Revenue has misunderstood the response received from NOIDA as is reflected in the impugned show cause notice. The petition is allowed and the impugned show cause notice is set aside.
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