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AMR India Ltd. Versus Commissioner of Central Excise, Customs And Service Tax Hyderabad-II

2016 (1) TMI 67 - CESTAT BANGALORE

Valuation - inclusion of value of free supply - works contract - activity of blast hole drilling, controlled blasting with shock tube initiation, excavation, loading, transportation and dumping etc. of over-burden - Held that:- value of diesel supplied by the service recipient free of cost to the assessee, who was providing site formation services, would not be a component of the gross value charged for services provided for the purpose of computation of tax under Section 67 of the Finance Act. .....

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ly concluded that the same is more in the nature of a prize money for a good performance by the appellant and are in no way linked to the value of the services. As such we find no justification for including the same in the value of the services and to confirm service tax on the same. - Demand set aside - Decided in favor of assessee. - ST/20411/2014-DB - Final Order No. 22062/2015 - Dated:- 14-10-2015 - Archana Wadhwa, Member (J) And Ashok K Arya, Member (T) For the Appellant : Mr M V Subba Rao .....

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g with shock tube initiation, excavation, loading, transportation and dumping etc. of over-burden. The appellant was discharging its service tax liability on the amounts raised by various bills and paid by the service recipient. 2. In terms of the said agreement, M/s Singareni were providing specific quantities of explosives and diesel oils for rendering the above work. Further, in terms of the agreement, if the appellant consumes explosives and diesels over and above the agreed quantity per cub .....

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es and diesel oil is to form part of the assessable value of the services, raised demand of duty against the appellant by way of issuance of show-cause notice dated 21/10/2012 for the period March 2008 to March 2012. The said show-cause notice stands culminated into an impugned order passed by the Commissioner confirming the demand of service tax to the extent of ₹ 57,74,30,683/- along with confirmation of interest and imposition of penalties to the extent of 100% of duty confirmed in term .....

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n to the appellant by the service recipient for efficient use of diesel and explosives would form value of the services or not. 5. As regards the first issue we find that the Larger Bench of the Tribunal in the case of Bhayana Builders (P) Ltd Vs CST Delhi [2013 (32) STR 49 (Tri-L.B.)] has held that the cost of the free supply items by the service recipient is not to be added in the assessable value of the services. It is seen that the said decision was relied upon by the appellant before the le .....

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y items cannot be held to be a charge for the services provided by the service provider, the same would be equally applicable to the facts of the present case even though the services were different. In fact, the Tribunal in the case of Karamjeet Singh & Co Ltd [2013 (32) STR 740 (Tri-Del)]followed the Larger Bench decision of the Tribunal as also that of the Hon'ble High Court of Delhi in the case of Intercontinental Consultants and Technocrats Pvt Ltd Vs UOI [2013 (32)STR 740 (Tri Delh .....

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recipient in that case was also M/s Singareni and M/s S.V. Engineering Constructions and the assessee was providing the same services which the present appellant is providing. As such the above referred decision shows that the issue is squarely covered in favour of the assessee. By following the same, we set aside the confirmation of demand on the said count. 7. As regards the second issue, we find that it is a part of the orders placed by M/s Singareni on the assessee providing provisions for i .....

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