TMI Blog2012 (7) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the customers in the manufacture of their final product. It is the customers of the assessee who clear the final product on payment of duty and no benefit accrues to the assessee on such clearances. Thus, the electricity supplied free of cost by the customers to the assessee does not in any way amount to additional consideration received by the assessee in kind - sustainability of the demand raised against the assessee being in doubt, it is a fit case for entertaining the appeal without any predeposit - in favour of assessee. - CENTRAL EXCISE APPEAL (L) NO.19 OF 2012 - - - Dated:- 9-7-2012 - J.P. Devadhar R.Y. Ganoo, JJ. Mr.V Shridharan, Senior Counsel with Mr.Jas Sanghavi i/by PDS Legal for the appellant. Mr.Prad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustomers in the production of iron and steel items, which are dutiable finished goods. 4. As per the contract entered into by and between the assessee and the steel companies for operating and maintaining the equipment, the assessee had received fixed amount as service charges. The said service charges received by the assessee were liable for service tax and accordingly the assessee had paid service tax on the amount received from the steel companies. 5. By a showcause notice dated 9th April 2009, the assessee was called upon to showcause as to why service tax amounting to ₹ 3.31 crore should not be recovered from the assessee on the ground that the assessee was receiving electricity free of cost from the steel companies and sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the taxable services. 8. Section 67 of the Finance Act, 1994, reads thus : 67. (1) Subject to the provisions of this Chapter, service tax chargeable on any taxable service with reference to its value shall, (i) in a case where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by him; (ii) in a case where the provision of service is for a consideration not wholly or partly consisting of money, be such amount in money, with the addition of service tax charged, is equivalent to the consideration; (iii) in a case where the provision of service is for a consideration which is not ascertainable, be the amount as may be determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Value) Rules, 2006 reads as under. Subject to the provisions of Section 67, the value of taxable service, where the consideration received is not wholly or partly consisting of money, shall be determined by the service provider in the following manner. a) the value of such taxable service shall be equivalent to the gross amount charged by the service provider to provide similar service to any other person in the ordinary course of trade and the gross amount charged is the sols consideration; b) where the value cannot be determined in accordance with clause (a), the service provider shall determine the equivalent money value of such consideration which shall in no case be less than the cost of provision of such taxable service. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee in kind. 12. The fact that the cost of electricity used in the manufacture of oxygen has to be considered in determining the excise duty payable on oxygen does not mean that the cost of electricity used in the manufacture of oxygen has also to be considered in determining the value of taxable services because the excise duty is on manufacture, where as, service tax is on the value of consideration received in cash or kind for the services rendered. Therefore, unless the cost of electricity supplied free of cost constitutes the consideration received by the assessee, the cost of electricity would not be includible in the value of taxable service. 13. Instead of supplying the electricity free of cost for the manufacture o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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