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TMI Blog2016 (4) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;commercial or industrial construction service' besides interest and penalties imposed under section 76, 77 and 78 of Finance Act, 1994. The appellant had executed various work orders for M/s Raymonds Ltd and their factories at Yavatmal, Chindwara and Vapi for which service tax on the amounts paid by M/s Raymonds Ltd were being deposited after availing the benefit of abatement of 67% permitted by notification no. 15/2004-ST dated 10 th September 2004 and thereafter by notification no. 1/2006-ST dated 1 st March 2006. 2. The proceedings against appellant were initiated on the ground that they were in receipt of material from M/s Raymonds Ltd and the value thereof should also have been included in the gross value before availing the aba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... works. The value of these, not unnaturally, was not included in the invoices raised by the appellant. According to Revenue, the non-inclusion of these values in gross receipts before applying abatement of 67% allowed in notification no. 15/2004-ST dated 10 th September 2004 (and its successor notification no. 1/2006 dated 1 st March 2006) was contrary to law. In his elaborate order, the adjudicating authority has also dwelt at length on the indispensability of the supplied materials for the rendering of 'commercial or industrial construction service' and asserts that the value of the free supplies cannot but be a part and parcel of the contract. The adjudicating authority further asserts that the inclusion is inevitable given that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Burn Standard Co. Ltd v. Union of India [1992 (60) ELT 671 (SC)] and Motherson Sumi Systems Ltd v Commissioner of Central Excise, Meerut [2002 (147) ELT 1121 (Tri-Del)]. 8. There is no doubt that the value of free supplies has not been included for computing tax liability by the appellant. The logic of essentiality of the material so supplied by the recipient of service is not comprehensible; the terms of supply are merely matters of commercial agreement between the supplier and recipient of service. That its inclusion is mandated by the reference to 'gross amount' in section 67 of Finance Act, 1994 also does not find favour. 'Gross amount' is a much misused term in taxation of services arising from the convenient uncoupli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by the decision of this Tribunal in Bhayana Builders (P) Ltd v. Commissioner of Service Tax, Delhi [2013 (32) STTR 49 (Tri-LB)] in which that specific question was decided as follows: "15. From the several aids to interpretation, referred to (supra) we are compelled to conclude that goods and materials, supplied/ provided/ used by the service provider for incorporation in the construction, which belong to the provider and for which the service recipient is charged towards the value of such supply/ provision / use and the corresponding value whereof was received by the service provider, to accrue to his benefit, whether independently specified as attributable to the specific material/ goods incorporated or otherwise, would alone constit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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