TMI Blog2017 (4) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... clearance service, but they would be covered under the category of mining service, which has become taxable w.e.f. 01.06.2007 only - CESTAT, Delhi in the case of M/s.Aravali Construction Co. Pvt. Ltd. vs. CCE, Jaipur-II [2016 (8) TMI 675 - CESTAT NEW DELHI] has held that such services are not covered under the category of site formation and clearance, excavation and earth moving and demolition - service tax demand of ₹ 21,58,467/- under the category of site formation service cannot be sustained and is hereby dropped. Chargeability of the value of free supplies which include electricity and other items - appellant case is that it is only consideration paid which is taxable and not any material supplied for use during the course of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7/- under the category of site formation service. 3.1 For execution of the subject services the assessee appellant received certain free supplies from M/s. Hindustan Zinc Ltd. who are the recipient of their services as per the contract. The Revenue in the impugned order has confirmed the demand of service tax on the value of free supplies which include electricity and other items; the demand of service tax confirmed for free supplies is to the tune of ₹ 44,66,679/-. 3.2 The appellant is in appeal against confirmation of above demands of service tax. 4. With above background we have heard both the sides, represented by ld. Advocate Shri B.L. Narasimhan for the appellant and Dr. Neha Garg for the Revenue. 5. The main submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Ld. D.R. reiterates the findings given in the impugned order. 9. After having carefully gone through the case records and submissions of both the sides, it appears that the activities of services under consideration are to be treated as an activity auxiliary to the mining, their contract being indivisible contract. Such services are not taxable under the category of site formation clearance service, but they would be covered under the category of mining service, which has become taxable w.e.f. 01.06.2007 only. CESTAT, Delhi in the case of M/s.Aravali Construction Co. Pvt. Ltd. Teknomin Construction Ltd. vs. CCE, Jaipur-II 2017- TIOL-896-CESTAT-DEL has held that such services are not covered under the category of site formation a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Department as mining service, for the period prior to 01/6/2007 the same activity cannot be classified under site formation service. We find that the impugned order cannot be sustained on this ground. 9.2 Therefore, service tax demand of ₹ 21,58,467/- under the category of site formation service cannot be sustained and is hereby dropped. 10. In the case of free supply made by M/s.Hindustan Zinc Ltd. to the appellant assessee the issue is covered in favour of the appellant by the Larger Bench decision in the case of Bhayana Builders P. Ltd. (supra). CESTAT in the case of Bhayana Builders P. Ltd. (supra) has elaborated the scope of Section 77 of the Finance Act 1994. CESTAT in the said case interalia observed as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the goods and materials so supplied accrues to or is retained by the service provider. Wherever a monetary consideration is charged for providing the taxable service and no non-monetary consideration forms part of the agreement between the parties, it is clause (i) that applies and the value of the taxable service would in such case be the gross amount charged by the service provider and paid by the service recipient. (vi) .. (vii) In the light of the clear Legislative text, the unambiguous provisions of Sections 66 and 67 of the Act and in the light of the judgment in Intercontinental Consultants and Technocrats Pvt. Ltd. (supra), the conclusion is compelling and inviolable that the value free supplies by a construct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this contention. 10.1 CESTAT in the said decision Finally concludes as follows:- 16. In conclusion we answer the reference as follows : (a) The value of goods and materials supplied free of cost by a service recipient to the provider of the taxable construction service, being neither monetary or non-monetary consideration paid by or flowing from the service recipient, accruing to the benefit of service provider, would be outside the taxable value or the gross amount charged, within the meaning of the later expression in Section 67 of the Finance Act, 1994; and (b) Value of free supplies by service recipient do not comprise the gross amount charged under Notification No. 15/2004-S.T., including the Explanation thereto as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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