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TMI Blog2013 (11) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... re was a counter agreement between the licence holders and the applicant for purchase of goods exclusively by the applicant from these license holders. These agreements were executed in 2002. Though there was clause for appropriate price escalation over the years in the two agreements, only minor escalation of price was effected in the case of Thakurani Mine and there was no escalation effected in the case of Nuagoan Mine. Revenue further noticed that the applicant had been incurring substantial expenditure for doing mining services and bills raised by them were not covering the expenses of mining. Therefore, Revenue was of the view that values of services rendered to the license holders were suppressed. 2. Revenue also raised another issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, she submits that the contract for mining clearly showed what was the consideration received and when consideration received is apparent and in clear terms, Revenue cannot go to the Service Tax Valuation Rules, 2007 for determining the value of services. She also submits that value is estimated based on presumptions and assumptions and is totally imaginary. She also relies on the Tribunal's Larger Bench decision in the case of Bhayana Builders (P) Ltd. and Others Vs CST Delhi - 2013 (32) STR 49 (Tri.-LB). 6. Further, she submits that in the matter of difference between the value shown for which debit notes were raised and value for which ST-3 returns were filed she had given reconciliation statement before the adjudicating authority and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck to compensate the low value of services billed. Such undervaluation is evidenced by the accounts which shows that the expenditure incurred on services was much less than the realization of price for services that was being billed. Therefore, he submits that the demand is not based on any assumption or presumption. It is based on the audited accounts of the party and based on contracts between the two parties which are on record. It is also evidenced by the fact that over many years the price of services remained constant in one case and without proper escalation in the other case in spite of having a price escalation clause in the mining agreements. 10. In the matter of tax liability prior to 01-06-2007, he submits that it cannot be den ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Others (supra) supports her case. Section 67 (1) (ii) clearly deals with a situation where consideration is received partly in money and partly in form other than money. The decision in the case of Bhayana Builders (P) Ltd. and Others is on different facts. In that case the service recipient provided certain material to the service provider to do construction activity. Such material was of no use to the service provider except for using in the construction done for the service recipient. In this case the minerals received back from the service recipient is sold by the applicant for profit and such back to back agreements can act as vehicles for undervaluation. The applicants have not placed any material when Revenue has made an allegatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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